Jiffy to replace 7-Eleven at PTT stations
It’s all over the news and brokers research notes this AM about PTT mentioning the potential replacement of 7-11 stores by its own Jiffy stores over the coming years.
Jiraporn Khaosawas, managing director of wholly owned PTT Retail Marketing Co (PTTRM), said PTT has several years to prepare before the 7-Eleven outlets are replaced.
It is setting up its second goods distribution centre in Ayutthaya’s Wang Noi district after the first one was established in Pathum Thani province recently.
PTT had acquired the rights to the 7-Eleven franchise from CP All Plc, a retail business unit of Charoen Pokphand Group, by signing a 10-year contract.
…
Ms Jiraporn said PTT has 1,100 7-Eleven stores and 149 Jiffy outlets nationwide.
Source: Bangkok Post
Should this occur, it would mean 11% of CPALL’s stores will be gone.
Don
Research divisions will be ecstatic to do some number crunching. Still, it will be not happen until 3-5 years out.
this and AOT are the big retail plays in captive (travelling) markets .
Don
I misinterpreted that new article: Today’s Bualuang research notes say that the 10-year exclusive agreement between PTT and CPALL, first signed in 2002 (effective early 2003) and renewed for another ten-year term in 2011, states that each 7-Eleven outlet in PTT gas station has the right to operate for ten years after opening or license renewal. For example, a store that opened or renewed a license in 2016 will remain open as a 7-Eleven until 2026. As such, if PTT doesn’t extend the agreement again, the last 7-Eleven in a PTT station would close in early 2033.
Pon
Correct and, when reading between the lines, one may conclude that this most likely is a ploy by PTT Group to drive up investor interest in the upcoming IPO of its retail division.
Pon
Here’s something I’ve received this morning
*All PTT franchisees operating dealer-owned-dealer-operated (DODO) petrol stations (DODO) must use 7-Eleven stores. They don’t have the choice to use Jiffy.
*PTT’s own petrol stations consist of: 1) those owned directly by PTT; and 2) those owned by PTT’s subsidiary called PTT Retail Management Co (PTTRM). They are company-owned-company-operated (COCO).
*The stations owned by PTTRM are former JET petrol stations which PTT acquired from ConocoPhilips in 2007.
*Under the existing agreement with CPALL, petrol stations under direct ownership of PTT can only have 7-Eleven stores. No Jiffy.
*This means if PTT were to open a new company-owned-company-operated station (COCO), it must use 7-Eleven.
*Only PTTRM can operate Jiffy stores and it is currently operating Jiffy at legacy petrol stations that used to be JET.
*If PTTRM were to open a new company-owned-company-operated station (COCO), it has to use 7-Eleven if the store size is less than 279 sqm. Only when planned store size is more than 279 sqm would PTTRM be able to open a new Jiffy store. Arguably, a store larger than 279 sqm will be in a different segment from 7-Eleven.
don
Hi Khun Pon, with the PTT subsidiary IPO about to happen, I am trying find who the under-writers are, without success. Thanks in advance. Don.
Pon
Because it isn’t public yet, though expect the usual combination of international (jpm, cs) and domestic players (phatra, scb) to do the IPO and several brokers offering the shares.
don
Thanks Khun Pon, I will check the names you have given. Don.
Pon
I suspect that it has been postponed to 2020