Globe-trotting Jollibee sets aggressive expansion with P14.7-B outlay
Fast food giant Jollibee Foods Corp. (JFC) aims to breach the 4,000-store milestone this year as the globalizing homegrown retailer earmarked a record-high capital spending budget of P14.7 billion to fund its most aggressive expansion to date.
“We will continue to aggressively pursue acquisitions and organic growth to accelerate the company’s growth and profitability,” JFC founder and chair Tony Tan Caktiong said during yesterday’s JFC stockholders meeting.
As of end-May, JFC had 3,555 stores worldwide across 12 brands in 17 countries. Last year, it ended with 3,253 stores, excluding the stores of its overseas affiliates where it does not exercise majority control.
In a press briefing, JFC chief finance officer Ysmael Baysa said this year’s capital spending would be the biggest in the company’s history. Last year’s actual capital outlays amounted to P6.7 billion.
Of this year’s budget, P9 billion will be for store expansion and renovation while P5 billion will be for new commissaries in the Philippines and China in order to support the growing store network.
Tan Caktiong said JFC was able to open a large number of new stores through the years because of improving return on investments and increasing organization capability that allowed it to scale up business across different brands.
In 2016 alone, JFC opened 342 new stores, 244 of which are in the Philippines and 98 are overseas. This 6.7-percent store network expansion was faster than the historical organic network growth of about 4 percent.
This year, JFC plans to open a total of 350 new stores, 100 of which will be overseas.
The network of stores under Superfoods Group, the Vietnam-based holding firm for Pho24 and Highlands Coffee brands which JFC is grooming for public listing, was also consolidated into the group in May.
Now under JFC’s control, SuperFoods plans to open 485 new stores in the next three years. Tan Caktiong said this expansion would be partly funded by proceeds from an initial public offering, targeted for July 2019.
Including the store network of American hamburger chain Smashburger and Taiwan’s 12 Hotpot, JFC’s store count would be 3,948, already within striking distance of the 4,000-store goal.
If the sales of affiliate overseas stores were to be consolidated into JFC, Baysa estimated that offshore business would also account for 30 percent of total sales.—DORIS DUMLAO-ABADILLA
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