President Chain Store Corp (PCSC, 統一超商), which operates the nation’s largest convenience store chain, 7-Eleven, expects President Chain Store (Shanghai) Ltd (統一超商上海便利) to start making a profit from 2018, following years of store and strategy adjustments.
PCSC posted NT$9.09 billion (US$289.72 million), or earnings per share of NT$8.74, in net profit last year, up 13.06 percent from 2013 and marking it a record-high level for two consecutive years, the company said in a statement.
The company, which has a total of 42 business units, said its businesses in China reported about NT$100 million in net income last year, according to the statement.
“The [Shanghai] unit saw its net loss contract by nearly 40 percent last year from a year earlier, reflecting the positive effect of the company’s lean-and-mean business strategy,” PCSC president Ray Chen (陳瑞堂) told a media briefing in Taipei.
EXPANSION
PCSC has been accelerating its expansion in China for several years, but found it difficult to boost profitability and changed its strategy to focus on profitable outlets and discard loss-making businesses two years ago.
The strategy gradually took effect last year, with same-store sales showing double-digit percentage growth from the previous year, according to PCSC data.
Chen said a medium-term plan is in place for the company’s convenience stores in Shanghai, which might help the Shanghai operation turn a profit in 2018.
The company has 80 convenience stores in Shanghai and plans to raise the number to 100 by the end of this year, he said.
CORE BUSINESSES
Overall, Chen said PCSC is targeting single-digit percentage growth in consolidated sales this year, mainly due to the convenience store operator’s core business in Taiwan and various other highly profitable business units, such as President Starbucks Coffee Corp (統一星巴克), President Drugstore Business Corp (統一生活事業) and President Transnet Corp (統一速達).
The company reported consolidated sales of NT$208 billion last year.
INTEGRATION
In addition, the company plans to accelerate resource integration within the group this year by forming more alliances between its business units, Chen said.
Last year, the company started adopting an in-store shop model for sales of products made by other business units, such as Mister Donut Taiwan Co (統一多拿滋) and Duskin Taiwan (樂清服務), in a bid to generate more sales for the group, he said.
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