In 2012, the Thai economy expanded well despite pressures from the world economic conditions and concerns over the European sovereign debt crisis and the US financial situation. The main driver of Thai economic growth was domestic demand from household consumption and private investment to restore damaged facilities after the severe flooding at the end of 2011. Government economic stimulus policies such as the reduction in corporate tax to 23 percent and Baht 300 minimum wage policy also contributed to economic growth. As a result, Thailand posted GDP growth of 6.4 percent in 2012. The Company continued to record robust growth in the previous year. The Company’s total revenue of consolidated financial statement was Baht 197,816 million, increasing 22.2 percent, and net profit was Baht 11,023 million, raising 37.7 percent. At the end of 2012, the Company had a network of 6,822 stores covering 77 provinces in Thailand and was able to serve over 8 million customers per day.
The Company continued to focus on developing strategies to cater to the demands of customers and increase customer satisfaction in purchasing products and services from the store. One of the main strategies is becoming “the convenience food store of Thais” by assorting products that are fresh, clean, safe, and demanded by customers, with emphasis on ready-to-eat meals. The Company has introduced a wide variety of menus as well as festive products and has developed new items with its business partners to achieve competitive differentiation. Sales promotion activities were organized throughout the year. One such example is the “Love Thailand Stamps” which was jointly organized with the Tourism Authority of Thailand during the third and forth quarter. Seventy seven types of stamps showcasing the highlight of each province were used to promote the attraction of each province and domestic tourism. This sales promotion activity received great cooperation from suppliers and was well-received by customers.
In 2013, the Company aims to rollout another 500-550 stores and renovate 500-600 existing stores. Emphasis will be given to increasing the proportion of franchise stores and opening more stores in the provinces to support development of urban areas in the provinces. Other supporting factors include smaller household size and increasing purchasing power following the government policy to increase wages. This has resulted in changes in consumer purchasing behavior, demanding greater convenience and speed in purchasing products and services. Furthermore, the Company continues to develop its supply chain to be more effective,
creating competitive advantages. The Company plans to expand investment in its subsidiaries to increase production capacity of ready-to-eat food products, invest in information technology systems, and expand the distribution center in Samut Sakhon province to support store expansion. At the end of 2012, the northern regional distribution center in Lampoon province was opened.
In terms of organizational development, the Company strives to build a stable and sustainable organization with emphasis on Total Quality Management (TQM). Organizational knowledge has been managed systematically and effective use of information has been promoted, leading to greater innovation. The Company has also reviewed and revised its mission to build strong ties with customers through continued development of innovative products and services.
In relation to giving back to society, the Company continues to implement various projects that are beneficial to communities and society. Focus is given to developing human resources to be prepared for the ASEAN Economic Community (AEC) through the bilateral vocational education system of Panyapiwat Institute of Management and Panyapiwat Technological College, which places importance on developing intellectual skills to create good and capable people for Thai society. Moreover, the Company realizes importance to other social contribution activities and environmental conservation such as the Schools that Love Reading Project, 7 Book Awards Project, Sharing Knowledge with Traditional Retailers Project, and the Thinking Plastic Bag Campaign under the 7-go-Green Project with the aim of reducing the use of plastic bags.
From dedicated management of business operations and joint efforts from all sectors, the Company would like to express sincere appreciation and thanks to all customers, business partners, shareholders and supporters for their unwavering support of the Company’s business. No less important, the Company is most grateful to its devoted employees who have been instrumental to the Company’s solid growth. Return on total shareholders’ equity for the past 3 years was high at an average of 41 percent per year. In addition, from the Corporate Governance Report of Thai Listed Companies 2012 by the Thai Institute of Directors Association, the
Company continued to receive a “Very Good” CG score. It has also been recognized by Forbes as one of Asia’s Fab 50 Companies 2012, for the second consecutive year, as well as awarded as Thailand’s Top Corporate Brands 2012 in the service sector, for the second consecutive year, by Chulalongkorn University’s Faculty of Commerce and Accountancy. Furthermore, the Company won the “Best Retailer in Thailand” for the third consecutive year from the Retail Asia-Pacific Top 500 Ranking 2012 Awards. From these achievements, the Company is determined to continue operating its business with good corporate governance, integrity, transparency, and the interests of all stakeholders. Last but not least, the Company has long-standing commitment to help improve the Thai economy and society, contributing to the country’s continued prosperity
and growth.