JOLLIBEE Foods Corp., the homegrown fast-food chain, said it may spend the same amount of capital expenditures for next year as it sees expanding to two more Middle East countries.
Ysmael Baysa, the company’s CFO, said the company may spend P9.3 billion by next year to improve its network of stores both in the Philippines and overseas. The amount was the same amount of capex earmarked for the year.
Baysa said the company’s strategy to allot about two-thirds of its expansion at home and a third to overseas markets has not changed.
For next year, it will open at least 100 more stores, excluding the US market, and about 200 stores more in the Philippines. Were still finalizing our numbers. We have long-term plans but we have not finalized the numbers. We know the trajectory, we know the potential but we have not firmed up the numbers. But yes, it will be higher [than the number of store rollouts this year] because even this year, we could have opened more based on demand, Baysa told reporters. In total, the company is opening 300 new stores this year from last year’s 2,764 branches across all brands.
A few months ago, Jollibee faced social media and public outrage due to lack of products that resulted in 72 of its stores to shut down operations temporarily.
Baysa cautioned that it may happen again due to logistical problems and demand continuing to rise.
“This year we are opening 200 new stores in the Philippines, almost double our historical trend. But that is still short of the demand,” Baysa said.
“Right now, our main segment is the Philippines. China and US are the remaining main markets. But between the two countries, the US is only 5 percent of the portfolio while China is 12 percent. So we want to balance it,” he said.
The company has yet to finalize any deal in the US, but it already owns Jinja Bar in New Mexico from a previous acquisition. Company officials earlier said China may be the world’s biggest consumer market due to its sheer size, but the US follows and Jollibee’s focus will be on these two countries to fuel its growth.Jollibee may have been expanding overseas during the past few years, but the company’s income is mainly derived in its home market in the Philippines.
Baysa said its international operations has been growing at about 22 percent to 23 percent, but its contribution to the total income of the company remains the same over at about 20 percent and the rest from the Philippine market. “And the reason is the domestic market is also growing faster. So in recent months, the domestic market is even growing faster than before. So we’re not able to change the ratio. But we’re not complaining because the result is actually very good,” Baysa said. The ratio will change once it has gotten a better foothold in the US market. At present, Jollibee has a fewUS branches, catering mostly to Filipino consumers and not the general market.
This time, the company wants to get a better grip of the US market by buying a company that will cater to the US consumer, just like what Jollibee did in the Chinese market where it acquired and operate a local brand.
At the moment, the company has 2,181 restaurant outlets—811 under Jollibee brand, 400 Chowking, 199 Greenwich, 278 Red Ribbon, 459 Mang Inasal and 34 Burger King.
Overseas, it has 583 stores —313 Yonghe King, 43 Hong Zhuang Yuan, 45 San Pin Wang, 101 Jollibee, and 46 Chowking stores.