PHILIPPINES – Jollibee Foods Corporation, a Filipino multinational chain of fast food restaurants has earmarked US$138 million (7 billion pesos) to steer its global business restructuring triggered by the coronavirus pandemic.
In a disclosure to the Philippine Stock Exchange, Jollibee said the planned changes will take place in the company’s businesses around the world, especially in its largest markets – the Philippines, China, and North America, a report by DealStreet Asia reveals.
The fast-food chain giant, which operates nearly 3,300 restaurant outlets in the Philippines and has a global store network of 4,689 stores said that it intends to invest part of the capital in establishing cloud kitchens, as part of it innovative ways to cushion the restaurant business form economic shocks.
The investment comes amid the raft measures that have been laid down in efforts to check the spread of the economic ravaging disease. Social distancing and community quarantine measures in the Philippines, Jollibee Foods’s biggest market, have seen most of its stores operate at minimal capacity, with some offering only take-out and delivery options to customers.
Acknowledging the impact to the business, Jollibee Foods Chief Executive, Ernesto Tanmantiong said in the disclosure to the Philippine Stock Exchange that “it is again time to embark on another business and organisation transformation in response to changing consumer behaviour caused by the Covid-19 pandemic.”
Part of Jollibee Foods’ restructuring plan would be to set up “cloud kitchens,” which it describes as undermarked delivery outlets with no dine-in facility located in discreet, low-rent sites.
The company further plans to increase its capacity for delivery to home and office, take-out, and drive-thru, installation of mobile applications to facilitate food ordering and payment, and the implementation of safety and social distancing measures in dining areas.
The fast-food chain also plans to shut down weak-performing outlets. However, the copmay noted that it will continue to open new stores in prime locations and expects to open a worldwide total of 171 company-owned new stores and renovate 96 existing stores this year.
“These changes will be made with the assumption that consumers around the world will not quickly revert to pre-COVID 19 behavior once lockdowns and other forms of restrictions are lifted in different countries,” JFC said in the disclosure.
In March, Jollibee revealed that it will be halting its earlier plans to invets US$177 million (9 billion pesos) from 2020 to 2021, given to what it described as operational constraints to the construction of facilities and to the uncertain volume of demand due to the limited mobility of consumers, the source cited above reported.
Ysmael V. Baysa, the Chief Financial Officer said the company’s financial performance in 2020 started strongly but the Covid-19 pandemic caused the temporary closure of a high number of stores and dramatically reduced or eliminated dine-in sales at our restaurants, starting in China in February.
“Our sales and profit for Q1 2020 eventually were not good. 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 said, adding that the profit estimate for this year “will not be good at all” due to the overall economic environment.