Monday, 6 July 2009

Red Ribbon, 7-Eleven to put up more stores this year

With Cheryl M. Arcibal
GMANews.TV
http://www.gmanews.tv/story/166733/(Updated)-Red-Ribbon-7-Eleven-to-put-up-more-stores-this-year

MANILA, Philippines - Red Ribbon, the bakeshop operator owned by the Jollibee group, and the Philippine Seven Corp., which runs local 7-Eleven stores, will both put up more domestic outlets within the next two years.

Of Red Ribbon’s 24 stores to be opened this year, eight will be run by its franchisees while the rest will be owned by the company, Froilan Manotok, Red Ribbon South Luzon operations head, told GMANews.TV.

Depending on type, size and location, each store will cost anywhere between P7 million and P11 million, he added.

“A full store will cost between P7 million and P8 million while a free standing store will cost between P9 million and P11 million," said Manotok.

By year-end, the company will have a total of 240 stores.

Red Ribbon, which also serves set meals, will be establishing ten more stores in South Luzon.

Although the company currently runs 30 stores in the US, no plans have been made to increase stores overseas, Manotok said.

Jollibee Foods Corp. (JFC), the country's largest owner and operator of fast food chains, is seeking to be global player in the fast food industry, targeting to source half of its total revenues from offshore operations and the other half from the domestic market.

Shares of JFC stayed unchanged at during Monday’s trading at the Philippine Stock Exchange (PSE).

7-Eleven sets Visayas, Mindanao expansion

For its part, the Philippines’ exclusive franchise holder of 7-Eleven stores said it plans to establish “hundreds of outlets" in Visayas and Mindanao within the next two years.

By 2010, the company expects to open 90 stores in the country’s second- and third-largest islands, Francis S. Medina, Philippine Seven Corp.’s division manager for business development, told reporters.

Half of these new stores will be company-owned while the rest will be run by franchisees, Medina said.

The company may need P180 million for its expansion although a franchise for a store is estimated at P3 million, he added.

By year-end, Philippine Seven Corp. expects to have 450 outlets all over Luzon. Thirty-five percent of these stores are company-owned.

Majority of its stores are in Luzon because of logistics issues, Medina said, adding that these concerns will soon be addressed to support its Visayas and Mindanao expansion.

Despite heightened competition provided by rivals such as the Gokongwei’s Mini Stop, Philippine Seven continued to grow its revenues last year.

Revenues are expected to expand by 15 percent by year-end, even as June sales fell because of “the rains and the delayed school opening due to the flu virus," Medina said.

Besides being considered as the world’s largest chain store in any category, it has surpassed McDonald’s branches by 1,000 outlets.

7-Eleven stores can be found in 18 countries including the United States, Canada, Taiwan, and Thailand.

Shares of Philippine Seven Corp. remained unchanged at P2.50 apiece during Monday’s trading at the PSE.

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