MANILA, PHILIPPINES – With its businesses showing good signs of improvement and its business transformation well underway, homegrown restaurant company Jollibee Foods Corporation (JFC) expects a strong recovery post the COVID-19 pandemic.
JFC CEO Ernesto Tanmantiong shared during the company’s Annual Stockholders Meeting that, although the pandemic has brought times of unprecedented change, the company’s long-term growth strategies, vision, mission, and values remain the same, while cognizant of the need to adapt to changing consumer habits.
“We do recognize that the COVID-19 pandemic has brought shifts and lasting changes to consumer behavior, such as the greater use of digital, work from home, and more reliance on delivery and takeout. That is why JFC has embarked on a Business Transformation to address the changing economics of our business across the globe, especially in our largest markets – the Philippines, North America, and China.” Tanmantiong said.
Business Transformation
As part of its PHP 7 Billion business transformation, the company will focus on building its off-premise channels such as delivery, drive-thru, and take-out. Its strengthened partnership with aggregators resulted in sales growth of 2 to 6 times, depending on the market. It also implemented call and pick-up and curbside pick up to increase take-out sales. Turnaround time for drive-thru is likewise being improved to serve more customers.
The company also talked about its cloud kitchens, which are small, unmarked delivery outlets that enable JFC to quickly expand delivery coverage. In June, it opened its first cloud kitchen in North America located in Chicago and it will open soon in Singapore. It also opened its first cloud kitchen in UAE last March – a first amongst QSRs in that country, which has also been outperforming targets.
For dine-in, given its importance to the business and especially as restrictions ease in different markets, the company expounded on its heightened in-store safety measures. These measures include the installation of acrylic partitions on tables and counters and temperature checks before entry as applicable, the provision of sanitizers for customers, and the implementation of social distancing guidelines.
JFC has likewise introduced new Family and Group Meals for takeout, delivery, and drive-thru. Across all channels, the company continues to highlight the value for money its consumers get through its delicious but still affordable products, which is highly relevant in these times.
The company also bared its plans to expand and open new stores on a highly selective basis as more prime locations become available at lower rental costs. It will also continue running the business in more cost-efficient ways – streamlining its operational processes; consolidating commissaries and services that can be shared across its various brands; rationalizing non-performing stores, supply chain facilities, and organization structure; and shifting ad budgets to more digital media which allows better targeting at a lesser cost vs traditional media.
Signs of Recovery
JFC is seeing encouraging signs of recovery and improvement across its portfolio of brands. Sales recovery has already started in the US, China, Vietnam, Singapore, Hong Kong, and Brunei. In the US, delivery, drive-thru, and take-out have offset the loss in dine-in sales. It is also seeing significant improvements in sales in the Philippines, especially with 50-75% dine-in capacity now allowed.
Its two recent major acquisitions – Smashburger and Coffee Bean and Tea Leaf © (CBTL) – are also on-track to profitability by 2021. Smashburger, which was fully acquired by JFC in 2019, started the year strong with positive same-store sales growth in January and February. While COVID-19 affected the brand’s sales in mid-March, the brand quickly recovered by April and has registered positive same-store sales growth in company-owned restaurants even until June – outpacing the US QSR Industry. Its delivery sales increased significantly, contributing close to 50% of total sales. These improvements, which started in December 2018 when JFC became the 100% owner of the brand, were driven by enhancements on product taste, adjustments in pricing and serving size to provide better value, the roll-out of our quality management system, the transition to a new leadership team, and the opening of stores in prime locations.
For Coffee Bean and Tea Leaf ©, initiatives such as transferring its back-office accounting to JFC’s shared services in the Philippines, building and strengthening the brand’s leadership team, and creating synergies with Highlands Coffee, will drive profitability and sales for the brand.
“The COVID-19 pandemic has significantly disrupted our business and our lives, but Jollibee Foods Corporation is adapting very quickly and decisively as reported to you. I am confident as ever about the bright future of our company.”” said Tanmantiong.
Giving Back
At the onset of the pandemic, JFC immediately responded by providing aid to the most affected.
JFC, through its social responsibility arm Jollibee Group Foundation, donated Php220 million worth of food to frontliners and families in need in the Philippines – providing meals for 1.3 million frontliners, and 2.5 million food packs to over 500 thousand indigent families. JFC also continues to provide help through coin banks which were recently made available through digital channels. The company gave similar assistance to health care frontliners in the United States, China, the UK, and other countries where it operates.
JFC also allocated a PHP 1 Billion emergency fund to provide the full-month salary during ECQ and advanced payout of 13th month pay for all of JFC’s work teams, including senior citizens and PWDs assigned in the jobs program in partnership with LGUs. The same assistance was extended to its partner employers to provide financial support to their employees. This was also in response to the government’s call to assist workers during the health crisis. The company likewise provided store teams with vitamins, face masks and shields, as well as provided transport for those who are unable to get to their stores.
“I have also always believed in our JFC family’s resiliency and perseverance that has seen us through many obstacles before. We have a clear vision and we stay focused on our mission – ‘to serve great tasting food, bringing the joy of eating to everyone’. This is our pledge to our customers and the communities that surround us. We will emerge as a stronger business and organization out of this crisis.” Tanmantiong said as he ended his management report.
