Fast Food restaurant in Hong Kong
By Ian Sayson and Cecilia Yap
Jollibee Foods Corp., the Philippines’ biggest food chain owner, will ramp up its delivery, invest more in digital commerce and shut poorly performing stores as it adapts to the pandemic that’s dragging sales and profit.
The company that has built a global presence will spend 7 billion pesos ($138 million) to transform its business structure in its biggest markets which are the Philippines, China and North America, it said in a statement.
Jollibee expects 2020 earnings to come in lower than 2019 levels even as lockdowns and mobility restrictions are set to ease in the coming months, its CFO Ysmael Baysa said. The stock fell 2.6% at the close in Manila trading to its lowest in more than a month.
The plan, which includes tweaking the supply chain, changes in resources deployment, imposing social distancing in dining areas, pursuing mobile apps for ordering and payment, building “cloud kitchen” or purely delivery outlets in low-rent sites will put Jollibee in a “much stronger” footing for 2021, Baysa said.
“In the next few months, even as lockdowns begin to be lifted, we forecast that sales will continue to be much lower than year-ago levels,” Baysa says. “Our estimate is that our profit for 2020 will not be good at all due to the overall economic environment.”
Jollibee, which has 5,945 stores globally, will also make changes to its production and distribution facilities as well as management groups, it said. It will continue to open new stores -- adding 171 and renovating 96 this year -- while staying on the lookout for locations that may come in cheap.
© 2020 Bloomberg L.P.