5 Facts You Need to Know About 7-Eleven in the Philippines
The convenience store has become a staple in urban life for many Filipinos. Many of us have been to a convenience store at least once. More likely, many of us have been to a 7-Eleven here in the Philippines at least once this week.
How much do you know about 7-Eleven in the Philippines? Here are a few facts:
1| The first 7-Eleven in the Philippines
The very first 7-Eleven in the Philippines opened at the corner of EDSA and Kamias Road in Quezon City on February 29, 1984. The company that operates 7-Eleven here in the country—Philippine Seven Corp (PSC), actually registered with the Securities and Exchange Commission about a year and a half earlier, on November 23, 1982. PSC acquired the local franchise to operate 7-Eleven stores here in the Philippines a month later, on December 13, 1982.
Of course, 7-Eleven had been around long before that. 7-Eleven used to be called Tote’m Stores and first opened in Dallas, Texas, U.S.A. in 1927. It changed its name to 7-Eleven in 1946, reflecting its operating hours back in the day (7 a.m. to 11 p.m.). The rhyming ostensibly also helped boost its popularity with consumers.
Within the same year, 7-Eleven opened its second store in the Philippines: the one along President Ave., BF Homes, Parañaque City, which was adjacent to the entrance of a subdivision.
2| How many branches?
As of January 2020, there are over 70,200 7-Eleven stores globally. Japan has the most number of branches, with nearly 21,000, followed by Thailand (11,712), South Korea (10,016), U.S.A (9,364), Taiwan (5,647) and China (3,156).
The Philippines comes next. As of the end of December 2020, there are 2,978 7-Eleven stores in the country. A total of 1,610 of these are franchise stores, and the remaining 1,368 are company-owned.
While 7-Eleven stores might seem ubiquitous all over the country now, it wasn’t until 2012 when it opened its first store in Cebu, signaling its expansion outside of Luzon. Today, there are 432 7-Eleven stores in the Visayas and 285 in Mindanao. The rest are in Luzon.
3| 7-Eleven vs competitors
It’s no secret that there are now countless convenience store brands competing with 7-Eleven worldwide. In the Philippines, the main competitors are Ministop (owned by the Gokongwei group, which also owns Summit Media, the publisher of Esquire Philippines), Alfamart (a joint venture between an Indonesian company and the SM Group), Petron Treats / San Miguel Food Ave (owned by San Miguel Corp), Shell Select, All Day (owned by the group of Manny Villar), FamilyMart (now owned and controlled by Dennis Uy’s Udenna Corp), Total Bonjour (owned by Total Philippines), and Lawson (a joint venture between the Japanese company and the Ayala Group).
According to 7-Eleven Philippines, its market share in the local convenience store industry is around 30 percent as of 2020. It shrinks to around 2.7 percent versus other retail channels (groceries, supermarkets, drugstore marts, etc).
In August 2009, PSC forged a non-exclusive tie-up with Chevron Philippines Inc. to open 7-Eleven stores in selected Caltex gas stations, which has now reached 102 branches as of 2020.
4| Average spend of 7-Eleven customers
Before the pandemic, a typical 7-Eleven store sees about 900 to 1,000 customers per day, with each customer spending an average of P64. However, due to the lockdown and imposed quarantines, the number of average customers decreased to 532 per day while the average transaction increased to P89.02.
As for the breakdown of 7-Eleven’s business, general merchandise accounts for 78.88 percent of sales, food service and cup drinks at 17.60 percent, while bills payments and ICT services at 3.52 percent.
5| How much does it cost to open a 7-Eleven franchise?
7-Eleven in the Philippines was able to grow really fast thanks to a franchising system. One of the most frequently asked questions is how much a 7-Eleven franchise costs. According to its website, the franchise fee amounts to P600,000 which is to be paid upon approval of the application. But interested franchise applicants need to shell out much more than that, including P170,000 for initial store supplies, P800,000 for initial merchandise, and approximately P2.03 million for construction costs. Advance rent and deposit (depending on the lease terms) must also be settled before opening the store.
All in all, the total cash outlay to open a 7-Eleven franchise will range from P3.5 million to P5 million. However, as the company says in the FAQ section of its website, this investment scenario is just an estimation (with the exception of the franchise fee).