Seven & I Holdings’s c-store arm plans to open 1,000 convenience stores in the year to February 2011 in a bid to boost profitability after posting poor sales and earnings.
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As part of the plans, Seven-Eleven Japan also plans to close 500-600 under-performing outlets.
The retailer operates about 12,500 outlets nationwide and at the end of fiscal 2010 the unit will have opened a record 1,000 stores, and closed more than 500.
Nevertheless, the company yesterday (7 January) said that its net income fell to JPY69.3bn (US$752m) in the nine months to end of November, down 32% from last year.
Analysts at Tokyo’s Goldman Sachs offices said they were surprised at the company’s poor performance.
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By GlobalData“We expected convenience store operations, which have a high earnings weighting, and problematic GMS and department store operations to remain lacklustre, but they struggled more than we anticipated,” analysts told just-food.
Despite the promise of expansion in Japan, Goldman Sachs is dubious about Seven and I’s resurgence coming in the near future.
“Cost reductions failed to offset disposal losses and declining sales. We estimate operating profits fell 16% to JPY36.3bn, below plan,” they said.
