Philippine Seven Corp., the local franchise holder of convenience store chain 7-Eleven, said it temporarily closed down 30 percent of its store network following the Luzon-wide enhanced community quarantine due to new coronavirus (COVID-19) pandemic.
PSC said Wednesday in a disclosure to the stock exchange that only 60 percent of 2,900 stores operate during daytime, with just 10 percent open for 24 hours. About 30 percent were temporarily closed at the end of the first quarter.
PSC president and chief executive Jose Victor Paterno said the company experienced disruptions in the supply chain as movement of goods and manpower were hampered by the checkpoint systems in different local government units following the implementation of the ECQ.
The absence of public transportation also affected the ability of employees to gain access to the outlets.
“Even as we were in the midst of preparing the Company to adapt to the Covid-19 environment, a quarantine of such suddenness and severity was unexpected. Overnight, we faced challenges keeping stores staffed due to lack of public transport. We encountered supply chain bottlenecks for goods both entering and leaving our distribution centres due to checkpoints, and difficulties in cash management with a fraction of bank branches operational,” Paterno said.
He said the company also experienced a significant decline in customer count as quarantine passes limited shopping trips to one person per household.
“We have spent the time since working around such challenges, and adapting our operation to what we believe will be a fundamentally different landscape even after ECQ is eased. We expect impact on financial results for the second quarter to be very significant, depending on what post-ECQ environment is like and how quickly we are able to adapt,” Paterno said.
PSC reported that net income declined 5.7 percent to P1.44 billion in 2019 due to implementation of new accounting standards under the Philippine Financial Reporting Standard.
System-wide sales, however, expanded 22.1 percent to P56.3 billion while same-store sales rose over 10 percent, the highest rate of increase ever recorded.