Thai 7-Eleven number goes down
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Thai 7-Eleven operator CP All has reported slowing profit growth, despite increased revenue.
Net profit growth of 2.8 per cent was its weakest quarterly result in years, according to Thomson Reuters. Its net surplus was 4.78 billion baht (US$144.2 million). In the same period a year ago, growth reached 10.8 per cent.
The company’s gross margin slipped a half percentage point to 27.7 per cent due to higher sales of alcohol, cigarettes and game cards, which have low margins.
Total sales across the 10,000-strong Thai 7-Eleven store network was 129.7 billion baht, up 7.5 per cent, but the company was impacted by an increase in the minimum wage, rising power prices and higher supply chain costs.
CP All expects to have 13,000 stores by 2021.
Questions & Answers
Q.What caused the slowing profit growth for CP All, despite an increase in revenue?
What caused the slowing profit growth for CP All, despite an increase in revenue?
Profit growth slowed due to a half percentage point slip in gross margin to 27.7 per cent. This was driven by higher sales of lower-margin items like alcohol, cigarettes, and game cards, alongside increased operating costs.
Q.What external factors impacted CP All's financial performance?
What external factors impacted CP All's financial performance?
The company was affected by several external factors, including an increase in the minimum wage, rising power prices, and higher supply chain costs, which collectively impacted their overall profitability.
Q.What is CP All's expansion target for the Thai 7-Eleven network?
What is CP All's expansion target for the Thai 7-Eleven network?
CP All aims to significantly expand its Thai 7-Eleven store network over the coming years. The company expects to have a total of 13,000 stores in operation by the year 2021.
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