The 7-Eleven convenience store chain, which is exclusively licensed by PhilSeven Corp. (PSC) in the Philippines, is grateful to its developer and lessor partners for coming up with various measures to help retail establishments remain afloat as the pandemic continues to hit the country’s economy.
According to Uly Borral, Business Development Division Head, lessors have changed their business strategy to be able to cope with the effects of the pandemic. When 7-Eleven began to negotiate for rental concessions on stores in March, when the enhanced community quarantine (ECQ) was implemented, many lessors agreed to the terms.
As a result, almost 2,000 stores all over the country were given rental concessions, discounts, freeze escalations, percentage of sales and others by developers including SM, Ayala, Megaworld Properties, Cityland Development Corp., Araneta City, Inc., Filinvest Development Corp., Double Dragon Properties Corp., and Federal Land Inc.
Safe, sustainable biz ops
Aside from understanding the needs of its retail partners, developers and lessors also took the initiative of guiding retailers by keeping them up-to-date with the health and safety protocols set by the government. They even assisted in the proper sanitation and disinfection of 7-Eleven stores.
SM Supermalls, after waiving its rental fees to its tenants during the lockdown period, also gave rental concessions to stores like 7-Eleven to help them recover during the transition period and remain sustainable for a long-term period. It helped 7-Eleven keep its operations as among the essential shops needed to serve the public.
Part of SM’s implementation of safety protocols, under the guidance set by the Inter-Agency Task Force for Emerging Infectious Diseases (IATF-EID), is prioritizing safety from Covid-19 by giving free rapid tests to all employees and frontliners, providing them with sanitizers and thermal scanning, personal protective equipment, face masks and face shields, as well as implementing social distancing in their respective workplaces and malls. SM also tapped its digital platform Shop@SM and launched its Viber community to bridge its tenants to customers who wished to shop online. It also allowed curbside pick-up of items, take out and deliveries to reduce human-to-human contact.
When the government eased the community quarantine level, it allowed SM to extend its base mall hours which gave tenants like 7-Eleven to operate and serve customers longer.
Meanwhile, the operations team of Filinvest took the effort in issuing a “Back to Business Merchant Manual” as a guide for its tenants and retail partners in implementing the prescribed safety, sanitation, and social distancing protocols set by the IATF-EID.
On the other hand, Megaworld took advantage of its township model, which it pioneered in the country, and offered lodging to employees of its retail partners during the modified ECQ period to address the latter’s logistic challenges. This resolved the commuting woes of employees when public transportation was put to a halt by the government during the ECQ and helped in continuing operations of retail partners.
For Filinvest, it decided to waive the rent, commercial area maintenance, and air-con charges of its tenants from the period of March 16 until April 15, 2020. Similarly, Megaworld waived the rent of its retail partners in Metro Manila and the rest of Luzon that were not permitted to operate under government regulations.
Araneta City Inc. also implemented similar appropriate financial support to its tenants and maintained essential services (maintenance, sanitation, and security among others) to support operations of permitted establishments when the community quarantine started. When quarantine guidelines were eased by the national government and some public transport routes were allowed to operate, Araneta City organized the access to its area of permitted public transport routes/operators for the convenience of both customers and employees.
The company also intensified its information campaign with its various social media platforms, the Araneta City mobile app, and its Viber community group. The Viber community group is where people can interact and check for information and updates in the comfort of their homes about what’s currently happening in Araneta City, including the operations of the various offices at the Ali Mall Government Center.
Borral said they have negotiated more than 40 percent rental discount from lessors that gave them concessions, including franchised stores, for the month of October.
Small lessors but big partners
Similarly, small lessors like Emelda Nebres of Guinobatan, Province of Albay, extended help to the 7-Eleven store at their property. She said the pandemic caught everyone by surprise that resulted in a chain reaction stopping commercial operations in their area. This urged her to reach out to 7-Eleven to discuss the rental charges and agreed to a reduced rental fee until December of this year.
“I saw how the store’s operation went and it only seemed right to not collect the entire rent,” Nebres said.
The same sentiment was aired by landlord Alfredo Flores, 71, from Caba, La Union. When 7-Eleven approached him and proposed for a cut in rent, he immediately agreed since they as lessor also suffered losses. He even thought at first that 7-Eleven wouldn’t struggle from the effects of the pandemic.
“We fully understand that everyone was affected. The business sector in particular is hit very hard and we were more than willing to waive the rent during the lockdown period,” he said.
“Our continued cooperation with 7-Eleven has always been our “normal” and our “new,” Flores added.
“Even if they say we’re in the “new normal,” operations are still not running at 100 percent,” Nebres said. “Which is why I agreed for the aid to be until the end of the year. It is really unpredictable until when would this pandemic last but what we can do right now is meet halfway for sustainability and survival during the pandemic.
On the part of 7-Eleven, Borral said all the savings coming from the rental concessions given to 7-Eleven stores are being used for the company’s zero interest loan to its franchisees under its pandemic support program.