Robinsons Retail report strong annual sales growth

Nick Miles
Head of Insight - Asia Pacific
@RetailAnalysis

Date : 05 March 2020

Robinsons Retail has released a 22.8% growth in unaudited annual sales to PHP162.9bn (US$3.21bn). 

1,938 company controlled stores by year end

Robinsons grew LFL sales 3.4% during the year, while total sales growth was boosted by both new store openings and the consolidation of Rustan's Supercenters into the business. By the end of the year, the retailer had 1,938 stores trading, with an additional 2,001 franchised The Generics Pharmacy stores under its operation. In its fourth quarter sales grew 14.4% and LFL sales were up 3.5%. Overall profitability declined by 24.9% due to a new accounting standard, however stripping this out, core income grew 9.5% to PHP5.1bn (US$0.1bn).

Supermarkets accounted for 54.2% of sales in FY19

The retailer's supermarkets sales grew 41.9% to PHP88.5bn (US$1.74bn), with LFL sales up 3.6%. Although LFL sales slowed against a benchmark of 7.6% in it FY18, the retailer attributed the slowdown to strengthening competion, the closure of Honestbee in the market and the integration of Rustan's. The trading period marks the first full year since the acquisition of Rustan's, which started on 1 December 2018. Therefore, Robinsons ended the year with 265 supermarkets; 213 of these focused on Metro Manila and Luzon, the rest in the Visayas (36) and Mindanao (16).

Other business areas...

  • Department store sales grew 1.5% to PHP18.0bn (US$0.35bn), with LFL sales growth of just 1.0%. During the year Robinsons closed four net stores, ending the year with 49 shops. While LFL sales were impacted by ongoing renovations at its top performing stores.
  • DIY stores grew sales 3.4% to PHP14.4bn (US$0.28bn), with LFL sales up 2.5%. It ended the year with 12 net new stores, taking the network to 222 in total. LFL sales growth was restricted by hardware stock replenishment issues.
  • Net convenience store sales grew 9.2% to PHP6.7bn (US$0.13bn), with LFL sales up 3.2%. Growth was generated by new store openings, with the retailer ending the year with 507 stores trading, up from 499 in FY18. LFL sales growth was aided by improved demand planning and logistics. Total system-wide convenience sales gew 8.0% to PHP9.8bn (US$0.19bn).
  • Drugstores accounted for 10.9% of net sales and are the second most important business segment after supermarkets.Sales grew 11.8% to PHP17.7bn (US$0.35bn), with LFL sales up 9.9%. The retailer ended the year with 519 drugstores, excluding The Generics Pharmacy stores.

Positive outlook for FY20...

Looking forward the retailer plans to open between 100-150 new stores over the next year, whilst also drive healthy growth of between 3-5% in existing stores. As well as expanding through opening stores, Robinsons Retail will actively consider further mergers and acquistions to grow its network. Plus, it will now move into what it calls the third phase of its Rustan's integration. The business will also continue to invest in new ventures such as its partnership with Emart to open No Brand discount stores, as well as ongoing data and technology investments to enhanced its market efforts and improve operations.