CP All Plc, the operator of 7-Eleven convenience stores, plans to spend 11.5-12 billion baht this year to expand its business.
Kriengchai Boonboapichart, the company's chief financial officer, said 4-4.1 billion baht of total spending is for investment in new projects, subsidiaries and distribution centres, 3.8-4 billion is slated for store expansion, 2.4-2.5 billion is for store renovations, and the remaining 1.3-1.4 billion is for fixed assets and IT systems.
The company plans to open 700 new convenience stores this year, on par with last year.
Some 155 new 7-Eleven stores were opened in the first quarter this year.
"We will continue to open new stores, but with a more cautious approach. There are many uncertainties, so we will select locations that can build revenue and have real demand from customers," Mr Kriengchai said.
"Moreover, each location has to possess the capability to support our O2O [online-to-offline] retailing strategies."
CP All operated 12,587 branches of 7-Eleven at the end of the first quarter this year.
Of the total, 6,771 stores belong to business partners and 5,816 stores were owned by CP All.
Moreover, 85% of the stores were standalone with 15% located in PTT petrol stations.
CP All reported total revenue of 547 billion baht in 2020, down 4.3% from the previous year, with a net profit of 16.1 billion, a decrease of 27.9%.
In the first quarter this year, the company's total revenue dropped by 8.5% year-on-year to 133 billion baht, with a net profit of 2.59 billion, a fall of 54%.
The decrease in revenue was largely attributed to outbreaks of the pandemic, resulting in a slow recovery of domestic consumption, decreased consumer purchasing power and a lack of tourism.
Footfall per store per day in the first quarter this year declined to 845, down from 949 in 2020 and a peak of 1,187 before the Covid-19 outbreak.
The decrease is mainly a consequence of the first wave of the outbreak, followed by a new wave in late 2020.
The government announced measures to control the pandemic, resulting in a decrease in economic activities.
The slow recovery of the tourism industry and domestic consumption has also hurt prospects.
Furthermore, customer lifestyles are shifting to shopping online.
The company continues to implement O2O retail strategies, such as 7-Eleven Delivery, All Online and 24Shopping to satisfy customer demand.
CP All aims to provide prompt access to various consumer products, including at 7-Eleven stores, with delivery and pick-up service at branches seeing a good response, said Mr Kriengchai.