Jollibee plans to invest ₱7 billion for changes in global business structure

Published May 23, 2020, 12:00 AM

by manilabulletin_admin

By James A. Loyola

Jollibee Foods Corporation (JFC), one of Asia’s largest food service companies, is spending ₱7 billion to implement significant changes to its global business structure even as it expects a decline in earnings this year.


In a disclosure to the Philippine Stock Exchange, the firm said the changes will involve the rationalization of its non-performing stores, store network, supply chain facilities and management and support group structure.

It will also include building drivers of revenue growth for the future including food delivery-to-home and offices and take out and drive-thru, even as it continues to open new stores in prime locations.

The expense provision for this transformation will be set up in the second quarter of 2020 and will be incurred mostly within 2020.

JFC Chief Executive Officer Mr. Ernesto Tanmantiong said the firm had always achieved improvement in the effectiveness of the organization from deliberate changes in the past.

“It is again time to embark on another business and organization transformation in response to changing consumer behavior caused by the COVID-19 pandemic,” he added.

JFC Chairman 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.”

The planned changes will take place in JFC’s businesses around the world, most importantly in its largest markets – the Philippines, China and North America.

These changes will be made with the assumption that consumers around the world will not quickly revert to pre-COVID 19 behavior once lock downs and other forms of restrictions are lifted in different countries.

“Nevertheless, JFC’s brands in different parts of the world are expected to be quite resilient and to grow even in this time of economic difficulties as they had demonstrated in past crises because of their excellent product quality, value for money and reputation as truly trusted brands,” the firm said.

Despite a slashed capital expenditures budget for 2020, the JFC Group will continue to open new stores on a very selective basis. It expects to open a worldwide total of 171 company-owned new stores and renovate 96 existing stores in 2020.

“Our sales and profit for the first quarter of 2020 eventually was not good,” said JFC Chief Financial Officer Ysmael V. Baysa.

He noted that, “In the next few months, even as lock downs 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.”