Jollibee allots P5.5-B for 300 new stores
MANILA, Philippines - Fastfood giant Jollibee Foods Corp. (JFC) is fasttracking its branch expansion this year amid robust consumer spending locally and good market reception abroad.
JFC will spend P5.5 billion this year to put up 300 new stores across all its brands here and abroad, its top executive said.
“We are planning to open about 300 stores. Last year was about 200,” JFC chairman and CEO Tony Tan Caktiong said yesterday.
The faster pace of expansion will be supported by higher capital spending. Half of the new stores will be put up through franchising.
“I think last year we spent P4 billion. This year, I think we are targeting P5.5 roughly (in capital expenditures),” Tan Caktiong said.
The listed fastfood giant ended last year with more than 2,000 stores across all brands in the Philippines. As of end-September, the company was operating 2,040 stores in the Philippines: 765 for Jollibee, 383 for Chowking, 201 for Greenwich, 209 for Red Ribbon, 457 for Mang Inasal and 25 for Burger King.
Given higher consumer spending and new stores, the company posted double digit growth in sales and net income for the entire 2012, Tan Caktiong said.
“We see a good growth this year. Traditionally every elections we do well,” Tan Caktiong said, adding that JFC will likely post again a strong double digit growth this year.
For its operations abroad, JFC is looking to increase its exposure in China and penetrate Indonesia.
“We are looking at China. We are looking at expanding there,” Tan Caktiong said, adding that around half of the new stores will be set up abroad.
Closer to home, JFC wants to set its foot in Indonesia for the first time.
“We would like to (establish) a Jollibee in Indonesia,” Tan Caktiong said.
Indonesia, with its 300 million population, is easily thrice the market size of the Philippines, he said. For this country, JFC will introduce more spicy foods to cater to the locals.
As of end-September, foreign operations of JFC was composed of 541 branches accounting for around 20 percent of the total business: Yonghe King with 288 stores, Hong Zhuang Yuan with 52 and San Pin Wang with 39, all in China; 27 Jollibee, 32 Red Ribbon, 18 Chowking and three Chow Fun branches in the US; and 60 Jollibee and 22 Chowking stores in Southeast Asia and the Middle East.
Tan Caktiong said India and Myanmar is also in JFC’s radar but the company does not have enough manpower for the expansion.
In the nine months to September last year, the country’s largest food service company, posted P2.47 billion in earnings, up 20.4 percent from the same period in 2011 on the back of improved margins and higher sales in both domestic and foreign businesses.