(Source: Business World Online | 2 May 2017)
Metro Retail Stores Group, Inc. (MRSGI) is accelerating the expansion of its store footprint in the Visayas and Mindanao, while adopting a more opportunistic approach for any potential venture in Luzon amid tight competition.
MRSGI Vice-President for Business Development Joseph Conrad M. Balatbat said in an e-mail the Visayan retail giant plans to open 13 more stores with a gross floor area (GFA) of 123,000 square meters (sq.m.) between 2017 and 2018 compared to the 37,000 sq.m. rolled out last year.
The company will open new department stores, followed by hypermarkets, mostly located in Visayas.
“The priority for the company is still Visayas and Mindanao. We have a strong brand in Visayas and we want to leverage that and open more stores organically to make it more convenient for our customers,” Mr. Balatbat said.
“Luzon will be more opportunistic, given more presence of competition, and will be done through a combination of acquisitions and partnerships with mall developers,” he added.
The Gaisano-led firm is on the second year of a five-year program that aims to double its retail footprint to 800,000 sq.m. by 2021. The company is operating 25 supermarkets, 13 hypermarkets and 12 department stores.
“This year we are poised to continue the strong fourth quarter performance we had at the end of 2016 and are seeing a good trend at the beginning of the year,” Mr. Balatbat said.
MRSGI’s earnings growth slowed to 4% from 21% in 2015 following a challenging third quarter due to operating losses associated with the acquisition of Wellworth department stores in Metro Manila.
The company’s profit increased to P789 million from the P758 million reported for 2015, following a 7% uptick in net sales to P34.4 billion.
The government’s infrastructure drive and sustained robust economic growth are expected to continue fueling the growth in the retail sector this year.
“Coupled with reports also forecasting that global economic activity, especially in developing economies, will pick up in 2017 and 2018, signals further positive signs for remittances, the BPO (business process outsourcing) sector and the domestic retail sector,” Mr. Balatbat said.
— Krista Angela M. Montealegre