(Source: The Philippine Star | 7 May 2016)
Cebu-based retailer Metro Retail Stores Group Inc. (MRSGI) is spending as much as P15 billion over the next five years to double its footprint in a bid to sustain robust growth and strengthen its position in the industry.
On the sidelines of the company’s annual stockholders meeting yesterday, MRSGI chairman and chief executive officer Frank S. Gaisano said the group was looking to further “build on its gains and bring its best-in-class products and services to more areas underserved by modern retail.”
Gaisano expects 2016 to be another banner year for the company following a robust performance last year which saw earnings grow 20.6 percent.
“I believe 2016 will be another record year for MRSGI, being well on track with our store expansion and logistics efficiency initiatives to support our goal of doubling our footprint in the next five years,” he said.
Joseph Balatbat, investor relations officer at MRSGI, said the company expects to maintain its profit growth rate of 20.6 percent, driven by an increase in sales of at least 12 to 14 percent, high single digit same store sales growth, and continued rationalization of operating expenses.
“This is in line with the consensus forecast of P900 million in net income and P36.5 billion in net sales for 2016, representing growth of 21 percent and 12 percent, respectively,” said COL financial analyst Jed Frederick Pilarca.
Balatbat said the company has no immediate plans to tap borrowings.
Plans in the pipeline include the expansion of offerings to deliver relevant products and services to its customers.
“These strategic initiatives will allow MRSGI not only to achieve our financial goals, accelerate growth and increase operational efficiency but more importantly elevate the quality of service we provide to our loyal customers,” Gaisano said.
Gaisano said the company aims to double its current gross floor area of approximately 400,000 square meters.
MRSGI recently opened its 48th store in UP Town Center in Quezon City, bringing its total department store network to 11.
Another department store is also set to open in Fairview Terraces Mall.
MRSGI has also entered into a partnership with ALI for the establishment of stores in four new Ayala commercial developments — a department store and supermarket in Capitol Central in Bacolod City, Negros Occidental; a supermarket in The Shops at Atria in Mandurriao, Iloilo City; a supermarket in Central Bloc in Cebu City; and a department store and supermarket in the Ayala Malls Feliz in Pasig City.
“We look to these exciting opportunities on the horizon, as our readiness to expand is underpinned by our strong financial performance last year,” Gaisano said.
MRSGI’s net sales grew 13.9 percent to P32.3 billion last year. Same store sales grew 8.8 percent, driven by the strong performance of hypermarket, department store and supermarket formats.
Aside from store expansion, MRSGI is also ramping up its logistics and supply chain modernization program.
MRSGI recently inaugurated a 6,500-square-meter leased warehouse facility in Cebu equipped with advanced storage and security features. This complements its 11,400-square-meter warehouse area in Calamba City, Laguna that serves as a hub for its Luzon operations.
MRSGI has also acquired 37 new delivery trucks from Isuzu Philippines Corp. and 30 from Hino Philippines to boost its in-house delivery fleet. Each truck is equipped with tracking devices that will enable real-time monitoring of delivery and improve overall cost efficiency.
Metro Retail stores are present in key cities in Central, Western and Eastern Visayas, as well as in Central Luzon, Metro Manila and South Luzon.
According to Euromonitor, Metro Retail is the Visayas’ largest department store and hypermarket operator and second-largest supermarket operator in 2014 in terms of retail sales value.
Metro Retail was also Cebu’s largest retailer across all three store formats in terms of retail value in the same year.
— By Marianne Go