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7-Eleven's Expansion Plans Viewed Positively

CGS-CIMB Research said the expansion plan allows the company to test the market response towards its fresh-food offerings, reduce wastage and related costs.

PETALING JAYA: 7-Eleven Malaysia Holdings Bhd's (SEM) expansion focus on 7-cafe stores for the year is viewed positively, while its new automated warehouse is expected to improve operational efficiency in the long run.

CGS-CIMB Research said the expansion plan allows the company to test the market response towards its fresh-food offerings, reduce wastage and related costs.

SEM aims to open 50 new 7-cafe stores and convert its 100 existing classic stores into 7-cafe formats by the end of 2023.

CGS-CIMB Research noted that 7-cafes typically have shorter payback period of three to four years as compared to the classic stores which can go up to five to six years.

This is given the former's higher sales proportion of higher-margin fresh food products.

"In our view, the completion of its new fresh food commissary by end of 2023 will help support its enlarged 7-cafe store footprint and support its gross profit margin from financial year 2023 (FY23) onwards," said CGS-CIMB Research in a report on the convenience store operator.

The research house believes that SEM's plan to enhance its operational efficiency via its new automated warehouse can be achieved through higher fulfillment rate which would then further optimise its stores' product availability as well as avoiding any sales leakage.

SEM recorded a hike in total revenue to RM1.07bil with a net profit of RM25.36mil or earnings per share of 2.28 sen per share for its second quarter ended June 30, 2023 (2Q23).

SEMs convenience store (CVS) segment achieved its highest quarterly sales ever in 2Q23, mainly attributed to higher store count, higher footfall as well as higher operating hours.

Despite a lower average basket size of RM8.14, higher footfall evident through its higher customer count per day per store of 399 led to higher average per store day sales of about RM3,246, the research house's report noted.

"Thanks to its effective marketing campaigns and revamped My7E loyalty app, we are also encouraged to see growth across all its product categories, with a relatively stable mix," said CGS-CIMB Research.

However, the research house noted the CVS segment gross profit saw a 1.5% points year-on-year drop to 31.5% in 2Q23 due to costs incurred to set up its new warehouse, which is expected to be operational by end of 3Q23. CGS-CIMB Research reiterated a "hold" call on SEM with an unchanged target price of RM2.10 per share as well as retaining its FY23 to FY25 estimates given no major surprises.

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Woodbury Man Who Robbed Millville 7-Eleven Sentenced

A Woodbury man who robbed a Millville 7-Eleven at knifepoint last year got a 10-year prison sentence, Cumberland County Prosecutor Jennifer Webb-McRae said Thursday.

Sean Roberts, 54, must serve at least 8½ years before he will be eligible for parole, Webb-McRae said in a news release. Roberts pleaded guilty Nov. 30 to robbery and eluding.

Roberts committed a series of crimes Sept. 29, beginning with a 5:52 a.M. Robbery at the 7-Eleven at 926 N. High St. According to police, Roberts grabbed the store clerk from behind, held a knife to her neck and demanded money. The clerk handed Roberts about $130 in cash, and he fled on foot.

Later in the day, Millville police attempted to pull over a vehicle driven by Roberts after they had received information that the vehicle was stolen. When police activated their lights and siren, Roberts drove through a red light. He was apprehended shortly thereafter.

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