PH-listed Jollibee to invest $138m in business restructuring, to set up cloud kitchens

Philippines-listed fast-food giant Jollibee Foods Corporation (JFC) is spending 7 billion pesos ($138 million) for a sweeping global business restructuring, including the establishment of cloud kitchens, triggered by the coronavirus pandemic.

In a disclosure to the Philippine Stock Exchange, Jollibee said the planned changes will take place in the company’s businesses around the world, especially in its largest markets – the Philippines, China, and North America.

The company operates nearly 3,300 restaurant outlets in the Philippines and a global store network of 4,689 stores. It capitalises on consumers who prefer to dine-in, targeting families with kids.

But as social distancing and community quarantine measures are in place in the Philippines, its biggest market, most Jollibee stores are operating at minimal capacity, with some offering only take-out and delivery options to customers.

“It is again time to embark on another business and organisation transformation in response to changing consumer behaviour caused by the Covid-19 pandemic,” said JFC CEO Ernesto Tanmantiong.

Part of the restructuring plan would be to the establishment of “cloud kitchens,” which it describes as undermarked delivery outlets with no dine-in facility located in discreet, low-rent sites.

The focus would also be on increasing the company’s capacity for delivery to home and office, take-out, and drive-thru, installation of mobile applications to facilitate food ordering and payment, and the implementation of safety and social distancing measures in dining areas.

Weak-performing outlets will be shut down but JFC said it will continue to open new stores in prime locations. It expects to open a worldwide total of 171 company-owned new stores and renovate 96 existing stores this year.

“These changes will be made with the assumption that consumers around the world will not quickly revert to pre-COVID 19 behavior once lockdowns and other forms of restrictions are lifted in different countries,” JFC said in the disclosure.

In March, Jollibee announced that it is postponing about 9 billion pesos ($177 million) worth of capital expenditures from 2020 to 2021, given to what it described as operational constraints to the construction of facilities and to the uncertain volume of demand due to the limited mobility of consumers.

JFC Chief Financial Officer Ysmael V. Baysa said the company’s financial performance in 2020 started strongly but the Covid-19 pandemic caused the temporary closure of a high number of stores and dramatically reduced or eliminated dine-in sales at our restaurants, starting in China in February.

“Our sales and profit for Q1 2020 eventually were not good. In the next few months, even as lockdowns begin to be lifted, we forecast that sales will continue to be much lower than year-ago levels,” Baysa said, adding that the profit estimate for this year “will not be good at all” due to the overall economic environment.

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Following vacancies can be applied for (only in Singapore).   

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.