Business

Thailand’s Business Tycoons Go to Battle Over Convenience Stores

To capitalise on the trend towards consumers spending less on a more frequent basis, some of Thailand’s wealthiest tycoons are eyeing the convenience store industry. Charoen Sirivadhanabhakdi, the wealthiest man in Thailand, is in the forefront of this movement.

The spirits tycoon, who is worth over $11.5 billion, is waging an all-out campaign to get 30,000 mom-and-pop stores to adopt his ‘Donjai’ business model by 2027.

His Berli Jucker Public Company Limited runs a programme that turns standalone corner stores into convenience stores by providing logistics, marketing, and data management if the store agrees to buy at least some of its inventory from Berli Jucker’s other businesses, such as Big C Retail Corporation and Thai Beverage Pcl.

A who’s who of Thailand’s corporate elite is also among those eager to establish their claim. Keeree Kanjanapas, a mass-transit tycoon, and the Chirathivats, who amassed their fortune in department shops and shopping malls around the world, are among them.

However, CP All Pcl, the undisputed leader in the Thai convenience industry, poses a formidable challenge to any new entrants. The company operates over 14,000 7-Eleven stores and is the crown jewel of the Chearavanont family’s $28 billion fortune. According to research by CBRE Group, Inc., a real estate services provider, that accounts for over 75% of all convenience stores in the United States.

The new Prime Minister and Finance Minister Srettha Thavisin has begun a programme to distribute roughly 560 billion baht ($15 billion) in cash to help the sluggish economy, and the billionaires’ jostling highlights bullish expectations for the sector. Investments in the tourism industry are also supporting optimistic growth forecasts.

Convenience Stores thailand

Convenience Stores popping up everywhere

At its heart, though, is the growing popularity of convenience stores, which can be found on nearly every corner in Bangkok and other large cities and offer everything from ready-to-eat meals to everyday necessities and even electric bill payment.

Euromonitor International predicts a 5.4% increase in the sector’s revenue to 428 billion baht this year, after an 18% increase in 2022 due to the relaxation of Covid restrictions. More than two-thirds of convenience stores’ earnings may come from food and beverages by 2025, according to projections by Bank of Ayudhya Pcl.

“We have very high optimism about the retail industry as the new government has made an aggressive move with huge spending to boost the consumption and the economy,” Varorith Chirachon, executive director of SCB Asset Management Co told the Bangkok Post. SCB manages about $51 billion, including shares of CP All and Central Retail Corp Pcl. “Before it’s too late, many new players are trying to get a piece of this enormously promising market.”

Some attempts to share in the success are running across roadblocks.

Big C Retail was going to go public in August and raise $1 billion, but despite Charoen’s early success in his ambitious mom-and-pop expansion programme (he added about 1,400 stores in the three months ended June 30 for about 2,600 outlets in total), the IPO was delayed. When the market for investments has improved, the company plans to resume the share sale.

Convenience Stores thailand

Rebranding Convenience Stores

Meanwhile, the Chirathivat family is rethinking their approach to convenience stores after the coronavirus pandemic negatively impacted commerce in major tourist hubs, where they made a large portion of their $13.8 billion wealth through department stores, shopping malls, and hotels.

As the local franchisee of Japan’s FamilyMart, the business already has a footing in the segment; nevertheless, the number of these outlets has decreased from 900 in 2020 to roughly 400 as of March.

In an effort to strengthen its corporate identity, Central Retail announced in August that it will change its name from FamilyMart to Tops Daily. In addition to FamilyMarts, it also has roughly 300 Tops supermarkets and convenience stores. Lisa Lee and Siti Nur Fairuz Khalil, analysts at Bloomberg Intelligence (BI), estimate that the two businesses brought in a total of 43 billion baht in sales in 2017.

Finally, millionaire entrepreneur Keeree Kanjanapas hopes to profit from his smart-card, financial, and consumer-product company investments, as well as the Bangkok elevated-rail system he has championed over the past three decades. His BTS Group Holdings Pcl, which serves the city’s 10 million citizens, established its first Turtle convenience stores this year in prominent locations on the platforms of some of the stations. Additionally, it is putting up vending machines near the entrances of stations.

No matter the label, all of them have to contend with CP All’s efforts to further consolidate their hold on the market.

According to Jiraphan Thongtan, the company’s head of investor relations, the company is planning to expand its network in anticipation of a recovery in consumer spending and international tourism following the Covid-19 outbreak. Jiraphan said that CP All will spend up to 13 billion baht on its 2023 development plans, which would include the opening of at least 700 additional 7-Eleven outlets.

CP All’s convenience store sales increased by 22% in 2022, reaching 354 billion baht; BI estimates that 74% of that increase was attributable to the sale of food and drink. BI analysts predict that by 2023, the company’s group revenue and operating profit will both increase by double digits as a result of an increased emphasis on premium-food and non-food items, new cost controls, and economies of scale.

“Competition is fierce, leaving only the toughest survivors,” said Jariya Thumtrongkitkul, head of retail for Thailand at CBRE Group. “Convenience stores should assess their strategies for competing and growing.”

Business

PepsiCo Reduces Revenue Projections As North American Snacks And Key International Markets Underperform.

(VOR News) – In the third quarter of this year, Pepsi’s net income was $2.93 billion, which is equivalent to $2.13 per share. This was attributed to the company.

This is in stark contrast to net income of $3.09 billion, which is equivalent to $2.24 per share, during the same period in the previous year. The company’s earnings per share were $2.31 when expenses were excluded.

Net sales decreased by 0.6%, totaling $23.32 billion. Organic sales increased by 1.3% during the quarter when the effects of acquisitions, divestitures, and currency changes are excluded.

Pepsi’s beverage sales fell this quarter.

The most recent report indicates that the beverage and food sectors of the organization experienced a 2% decline in volume. Consumers of all income levels are demonstrating a change in their purchasing habits, as indicated by CEOs’ statements from the previous quarter.

Pepsi’s entire volume was adversely affected by the lackluster demand they encountered in North America. An increasing number of Americans are becoming more frugal, reducing the number of snacks they ingest, and reducing the number of times they purchase at convenience stores.

Furthermore, Laguarta observed that the increase in sales was partially attributed to the election that occurred in Mexico during the month of June.

The most significant decrease in volume was experienced by Quaker Foods North America, which was 13%. In December, the company announced its initial recall in response to a potential salmonella infection.

Due to the probability of an illness, the recall was extended in January. Pepsi officially closed a plant that was implicated in the recalls in June, despite the fact that manufacturing had already been halted.

Jamie Caulfield, the Chief Financial Officer of Pepsi and Laguarta, has indicated that the recalls are beginning to have a lessening effect.

Frito-Lay experienced a 1.5% decline in volume in North America. The company has been striving to improve the value it offers to consumers and the accessibility of its snack line, which includes SunChips, Cheetos, and Stacy’s pita chips, in the retail establishments where it is sold.

Despite the fact that the category as a whole has slowed down in comparison to the results of previous years, the level of activity within the division is progressively increasing.

Pepsi executives issued a statement in which they stated that “Salty and savory snacks have underperformed year-to-date after outperforming packaged food categories in previous years.”

Pepsi will spend more on Doritos and Tostitos in the fall and winter before football season.

The company is currently promoting incentive packets for Tostitos and Ruffles, which contain twenty percent more chips than the standard package.

Pepsi is expanding its product line in order to more effectively target individuals who are health-conscious. The business announced its intention to acquire Siete Foods for a total of $1.2 billion approximately one week ago. The restaurant serves Mexican-American cuisine, which is typically modified to meet the dietary needs of a diverse clientele.

The beverage segment of Pepsi in North America experienced a three percent decrease in volume. Despite the fact that the demand for energy drinks, such as Pepsi’s Rockstar, has decreased as a result of consumers visiting convenience stores, the sales of well-known brands such as Gatorade and Pepsi have seen an increase throughout the quarter.

Laguarta expressed his opinion to the analysts during the company’s conference call, asserting, “I am of the opinion that it is a component of the economic cycle that we are currently experiencing, and that it will reverse itself in the future, once consumers feel better.”

Additionally, it has been noted that the food and beverage markets of South Asia, the Middle East, Latin America, and Africa have experienced a decline in sales volume. The company cut its forecast for organic revenue for the entire year on Tuesday due to the business’s second consecutive quarter of lower-than-anticipated sales.

The company’s performance during the quarter was adversely affected by the Quaker Foods North America recalls, the decrease in demand in the United States, and the interruptions that occurred in specific international markets, as per the statements made by Chief Executive Officer Ramon Laguarta.

Pepsi has revised its forecast for organic sales in 2024, shifting from a 4% growth rate to a low single-digit growth rate. The company reiterated its expectation that the core constant currency profitability per share will increase by a minimum of 8% in comparison to the previous year.

The company’s shares declined by less than one percent during premarket trading. The following discrepancies between the company’s report and the projections of Wall Street were identified by LSEG in a survey of analysts:

SOURCE: CNBC

Business

Old National Bank And Infosys Broaden Their Strategic Partnership.

(VOR News) – Old National Bank, a commercial bank with its headquarters in the Midwest, and Infosys, a firm that specializes in information technology, have recently entered into a strategic expansion of their link, which has been in place for the past four years.

This expansion is more likely to take place sooner rather than later, with the likelihood being higher.

For the purpose of making it possible for Old National Bank to make use of the services, solutions, and platforms that are offered by Infosys, the objective of this expansion is to make it possible for the bank to transform its operations and processes through the application of automation and GenAI, as well as to change significant business areas.

This lets the bank leverage Infosys’ services, solutions, and platforms.

Old National Bank Chairman and CEO Jim Ryan said, “At Old National, we are committed to creating exceptional experiences for both our customers and our fellow employees.”

This statement is applicable to Old National Bank. Infosys is carefully managing the business process innovations that it is putting us through, putting a strong emphasis on efficiency and value growth throughout the process to ensure that it is carried out efficiently.

This is a routine occurrence throughout the entire operation. Because of Infosys’ dedication to our development and success, we are incredibly appreciative of the assistance they have provided.

Old National has been receiving assistance from Infosys in the process of updating its digital environment since the year 2020, according to the aforementioned company.

Ever since that time, the company has been providing assistance. The provision of this assistance has been accomplished through the utilization of a model that is not only powerful but also capable of functioning on its own power.

Infosys currently ranks Old National thirty-first out of the top thirty US banks.

This ranking is based on the fact that Old National is the nation’s largest banking corporation.

It is estimated that the total value of the company’s assets is approximately fifty-three billion dollars, while the assets that are currently being managed by the organization are valued at thirty billion dollars.

Dennis Gada, the Executive Vice President and Global Head of Banking and Financial Services, stated that “Old National Bank and Infosys possess a robust cultural and strategic alignment in the development, management, and enhancement of enterprise-scale solutions to transform the bank’s operations and facilitate growth.”

This remark referenced the exceptional cultural and strategic synergy between the two organizations. Dennis Gada is the one who asserted this claim. This was articulated explicitly concerning the exceptional cultural congruence and strategy alignment of the two organizations.

We are pleased to announce that the implementation of Infosys Topaz will substantially expedite the transformation of Old National Bank’s business processes and customer service protocols. We are exceedingly enthusiastic about this matter. We are quite thrilled about this specific component of the scenario.

Medium-sized banks operating regionally will continue to benefit from our substantial expertise in the sector, technology, and operations. This specific market segment of Infosys will persist in benefiting from our extensive experience. This phenomenon will enable this market sector to sustain substantial growth and efficiency benefits.

SOURCE: THBL

Business

American Water, The Largest Water Utility In US, Is Targeted By A Cyberattack

The largest regulated water and wastewater utility company in the United States stated Monday that it had been the target of a cyberattack, forcing the company to halt invoicing to consumers.

American Water, The Largest Water Utility In US, Is Targeted By A Cyberattack

American Water, based in New Jersey and serving over 14 million people in 14 states and 18 military facilities, said it learned of the unauthorized activity on Thursday and quickly took precautions, including shutting down certain systems. The business does not believe the attack had an impact on its facilities or operations and said employees were working “around the clock” to determine the origin and scale of the attack.

water

The corporation stated that it has alerted legal enforcement and is cooperating with them. It also stated that consumers will not be charged late fees while its systems are unavailable.

According to their website, American Water operates over 500 water and wastewater systems in around 1,700 communities across California, Georgia, Hawaii, Illinois, Indiana, Iowa, Kentucky, Maryland, Missouri, New Jersey, Pennsylvania, Tennessee, Virginia, and West Virginia.

SOURCE | AP