7-Eleven allots P711 million for pandemic support

MANILA, Philippines  — Philippine Seven Corp., the exclusive licensor of 7-Eleven in the Philippines, has earmarked P711 million for its pandemic support program (PSP)

These funds may be tapped by franchisees whose operations had been hit by the coronavirus disease 2019 or COVID-19 pandemic.

Franchisees can borrow as needed interest-free and pay back when able.

“We recognized immediately that the country’s (and the world’s) battle with COVID-19 would be long and painful, so the first thing we did was request our bankers for an increase in our credit lines.  Thankfully, they responded quickly and generously, and our next focus became how to deploy this access to capital strategically during the pandemic. The PSP is one such example,” Philippine Seven president and chief executive officer Jose Victor Paterno said.

Due to the pandemic, 22 percent of 7-Eleven stores were closed as of the end of April, and 11 percent as of the end of May.

“We remain highly confident in the worst case that we will get to the other side of this not just intact, but stronger.

Aside from our resilient and innovative culture, we can also count on continuing access to debt and capital markets.  Others in our ecosystem are not so fortunate, so in the spirit of bayanihan, we need to do our part to get them through this storm,” Paterno said.

He said just because one can borrow doesn’t mean they will make money, but that they would be able to survive longer.

Amid the challenges, Philippine Seven is cutting costs across the board and implementing forced leaves, retrenchments, and a freeze on hiring, salary increases, and store openings.

“Most of our 1,000+ franchisees have to pay rent, and we are doing our part to ensure they survive.  We are now asking our landlords to do theirs, because if they do not, the franchisee will have to close the store, as will we for our corporate-run stores,” he said.

He said the firm has a very long list of unprofitable stores and this situation is expected to continue until the end of the year, at the very least.

“If and when that happens, expect that space to be vacant for a very long time -- we were supposed to build 400 new stores this year, but have frozen expansion for the foreseeable future.  I believe other chains are in a similar situation,” he said.

Philippine Seven reported a seven percent drop in its first quarter profit to P104 million.