Shakey’s Pizza’s Q1 profit down 35%

Shakey’s Pizza Parlor Restaurant along CM Recto at Limketkai Center, Cagayan de Oro City. (PHOTO CREDIT: https://www.cdodev.com/2013/07/04/new-shakeys-store-nears-completion/)

The country’s leading pizza parlor chain operator, Shakey’s Pizza Asia Ventures Inc., saw a 35 percent year-on-year drop in first quarter net profit to P114 million as the lockdown measures imposed on Metro Manila and other key regions starting mid-March disrupted operations and sales.

During the second half of March, Shakey’s only had 9 percent of its network operational out of a total of 280 outlets – comprised of 249 Shakey’s and 31 Peri stores – servicing delivery and carry-out as the coronavirus (COVID-19) pandemic started affecting the Philippines.

As a result, the Po family-led company ended the quarter with systemwide sales of P2.3 billion, similar to same period last year.

“The temporary closure of a significant number of our stores, combined with the impact of operating leverage and various fixed costs, dampened our bottom line during the period. We expect the second quarter to be worse, possibly the most challenging I’ve experienced in my career, as we feel the full effects of limited operations and incremental costs due to the crisis,” Shakey’s president and chief executive officer Vicente Gregorio said on Monday.

“Health and safety remain paramount and, as a result, we’ve revisited every aspect of our operations to ensure that the necessary procedures and protocols, as aligned with World Health Organization (WHO) recommendations, are properly implemented and put into place. We also made several operating adjustments – including limiting our menu, shortening store hours, as well as reducing and reshuffling our workforce – in order to support our delivery and carry-out businesses amidst the quarantine period’s various restrictions.”

The company posted systemwide sales growth of 21 percent in January and February, prior to the enhanced community quarantine (ECQ), driven primarily by same store sales growth of 7 percent, the continued expansion of Shakey’s outside Metro Manila, and the consolidation of Peri-Peri Charcoal Chicken in June 2019.

Beginning mid-March, however, Shakey’s was forced to temporarily suspend operations of majority of its stores due to mall closures, limited public transportation, and the presence of checkpoints following various quarantine guidelines. Store operating policies and procedures were also updated and redeployed in order to ensure the health and safety of both employees and guests amid the ongoing COVID-19 pandemic.