President Chain Store Co (統一超商), the nation's largest convenience-store operator, will close stores to cut costs and boost profits while waiting for US-based 7-Eleven Inc's delayed decision on franchises in China.
The operator of the third-largest 7-Eleven chain plans to close as many as 30 a year of its 2,854 Taiwan shops, and to increase profit margins by selling more fresh food and products under its own brand name, said company president Hsu Chung-jen (
The company needs a new source of growth as the convenience-store market in Taiwan is saturated, consumer spending is falling and the economy is expected to contract this year for the first time since the government began measuring in 1952.
"We are not going to focus on new store openings to lead sales growth," said Hsu, in an interview. "In fact, we are closing some unprofitable stores."
7-Eleven is scheduled to compete a re-evaluation of the China market in first quarter of next year, said President spokeswoman Wang Wen-hsin (
President, controlled by Taiwan's largest food maker, Uni-President Enterprises Co (統一企業), wants the 7-Eleven franchise in China on its own. Still, the company didn't rule out teaming with other retailers for a bid it wants to come soon.
Hong Kong-based Dairy Farm International Holdings Ltd and Seven-Eleven Japan Co are competing with President for China rights.
Dairy Farm already operates 7-Eleven stores in the part of Guangdong Province which is next door to Hong Kong.
"We are very focused, so if we don't get the bid we won't look for another one so soon," Hsu said. "Of course, it will be painful for a while."
The company may expand into Indonesia and Thailand.
The company would like a decision on China by 7-Eleven soon.
Consumer spending in China's wealthy east coast cities is rising, drawing competitors such as Convenience Retail Asia Ltd, which runs Circle K shops in Hong Kong and other nearby Chinese cities.
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