Jollibee Manhattan —Contributed photo
Homegrown fast-food giant Jollibee Foods Corp. (JFC) is spending P7 billion to implement “significant” changes to its global business structure, including the streamlining of non-performing stores and beefing up delivery, take-out and drive-through services.
The expense provision for this transformation – which assumes that the world will not quickly revert to the pre-coronavirus (COVID-19) pandemic period – will be set up in the second quarter of 2020 and will be incurred mostly within the year, JFC told the Philippine Stock Exchange on Friday.
Jollibee chair Tony Tan Caktiong said: “2020 is an extremely challenging year for JFC as for most other businesses, but out of this transformation, we aim to emerge in 2021 as an even stronger business and organization. Regardless, our mission has not changed: to serve great tasting food, bringing the joy of eating to everyone! Our vision remains the same: To be one of the top five restaurant companies in the world.”
The planned changes will include the rationalization of the number of restaurants within certain geography or area, the rationalization of resources deployed in the restaurants, implementation of safety and social distancing protocol in the dining area, investment in digital commerce and technology, the increase in the capacity for delivery-to-home and office, take out and drive through, the installation of mobile applications to facilitate food ordering and payment, the establishment of “cloud kitchen” or unmarked delivery outlets with no dine-in facility located in discreet, low rent sites and the rationalization of production and distribution facilities. The changes will also include the transformation of support and management groups in the field and in the offices.
The restructuring will take place in JFC’s businesses around the world, most importantly in its largest markets – the Philippines, China and North America – as the company braces for poor earnings performance this 2020.
JFC chief financial officer, Ysmael Baysa, said: “JFC’s financial performance in 2020 started strongly but the COVID 19 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, 2020 and the rest of the business in March, 2020. Our sales and profit for Q1 2020 eventually was 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. Our estimate is that our profit for 2020 will not be good at all due to the overall economic environment. We are taking this opportunity to implement truly major changes in 2020 so that JFC will start 2021 in a much stronger position in terms of business model, operating efficiency, profitability and organization strength. We will then resume strong and consistent profitable growth for the years ahead.”