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Philippines: TRAIN law lifts 7-Eleven sales by 23%
MANILA, Philippines — The implementation of the tax reform law at the start of the year boosted the sales of convenience store giant Philippine Seven Corp. (PSC) by 23 percent in the first half.
Lawrence de Leon, head of finance at PSC, said in a disclosure that system-wide sales amounted to P22.17 billion from January to June, P4.1 billion higher than the P18.07 billion recorded in the same period last year.
Republic Act 10963 or the Tax Reform for Acceleration and Inclusion (TRAIN) Law has slashed personal income tax rate, translating to higher purchasing power for Filipino consumers.
De Leon said the new tax law favorably affected sales by increasing customer count and average basket size.
“The lower personal income tax strengthened the purchasing power of the middle class and the excise tax on sugar-sweetened beverages increased selling price but no significant decline in volume occurred,” De Leon said.
The increase in sales was driven by the improvement in same-store sales and the 14.3 percent increase in the number of operating stores with 299 new branches. In the first half, the nationwide footprint of 7-eleven stores stood at 2,386.
De Leon said PSC remains on track when it comes to pursuing its store expansion program after it earmarked P3.5 billion for its capital expenditures this year.
“It continues to invest in opening new stores in existing and new markets even if competition had slowed down. The capacity building expenditures on logistics assets and organizational capability have produced favorable results,” he said.
PSC is expanding merchandise assortment and launching of new food and beverage items to serve as differentiation compared with other channel to increase sales per store.
The company also launched its e-commerce business to take advantage of growing customer preference toward innovation and convenience.
In the first half, the convenience store operator grew its net income by 19.4 percent to P533.2 million from P446.4 million in the same period last year.
Source: https://www.philstar.com/business/2018/07/15/1833546/train-law-lifts-7-eleven-sales-23#Bfm722ZkGfARrcL2.99