Tue, Feb 10, 2009 - Page 12 News List

President Chain to cut spending, slow expansion this year

BLOOMBERG

President Chain Store Corp (統一超商), operator of the 7-Eleven and Starbucks franchises both here and in China, will cut spending and slow expansion this year because of cooling regional growth.

President Chain expects to spend as little as NT$3.5 billion (US$104 million) this year on new stores and remodeling, compared with as much as NT$4.5 billion last year, said Steve Chen (陳炳宏), a spokesman for the Taipei-based company. Spending in China will fall to as little as NT$500 million from NT$1 billion, he said.

“We’re now more focused on store performance than the number of stores,” Chen said in a phone interview yesterday.

Retail sales fell in the seven months through December as consumers cut spending amid job losses, pushing parent-level sales at President Chain down 0.1 percent last year. China had its slowest economic expansion in seven years, 6.8 percent, in the fourth quarter.

Still, President Chain will add 100 Taiwanese 7-Eleven stores this year for a total of 4,900, the same number it added last year, Chen said. The company originally planned to open 220 shops last year, he said.

Its Starbucks chain will add a net 11 stores in Taiwan and 23 in China this year, compared with a plan to open 18 in Taiwan and 39 in China last year. The company will open its first 7-Eleven stores in China by the end of March, aiming to have as many as 20 by the end of the year, he said.

“Mister Donut was particularly affected by the slowdown in the economy,” Chen said.

The company will shut four of its 46 donut stores in Taiwan this year, opening as many as five in China in a venture with Osaka-based Duskin Co, he said.

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