Jollibee Closes 255 Stores After Losing $240 Million During Pandemic
Philippine fast-food giant Jollibee is closing 255 company-owned stores as the company loses 12 billion Philippine pesos ($240 million) in sales during the COVID-19 pandemic.
Huge hit: The Jollibee Foods Corporation saw the massive loss in sales during the first half of the year, according to Rappler. In a financial statement released on Wednesday, the company suffered a 48.4% decrease in sales — 30.7 billion Philippine pesos ($625 million) — in the second quarter of the year as half of its stores worldwide had to temporarily close due to the pandemic. While the specific locations haven’t been specified, various stores in the U.S. will undergo a change in ownership.
The fast-food chain has 3,286 stores in the country and 2,588 across the globe, Mashable reported.
Although nearly 3,000 stores were temporarily closed, they were not all under the Jollibee brand as they also operate Chowking, Greenwich, Red Ribbon, Mang Inasal, Burger King and Panda Express in the country, according to Kami.
Included in net losses were the costs for the company’s business transformation program, emergency aid for their employees and to frontliners, and the lack of sales from no guests dining in.
“The spending for business transformation includes closure of 255 company-owned stores, change in ownership of 95 stores from company to franchisees, payment of pre-termination penalties of stores in the US and China, closure of supply chain facilities, and reduction in the size of the organization in various countries where we do business,” Jollibee chief financial officer Ysmael Baysa said.
Jollibee’s revenues fell by 46.6% — 23.3 billion Philippine pesos ($484 million) — by the end of the second quarter as the company started operating again in a limited capacity by only taking delivery orders and take-outs and no dine-in services.
Jollibee made a profit of 2.5 billion ($50.9 million) around this time last year, Inquirer reported.
Positive outlook: Even with the massive loss, Jollibee remains positive in the midst of it all.
“The business results were very bad but in line with our forecasts,” Jollibee CEO Ernesto Tanmantiong said. “We are now focusing on rebuilding our business moving forward along with implementing major cost improvement under our business transformation program.”
Tanmantiong remains optimistic as they predict Jollibee’s sales and profit will improve in the coming months.
“Our business-building effort includes introducing exciting new products, launching new marketing campaigns, opening cloud kitchens, introducing improvement in our delivery systems,” he said.
The company is also planning to open new stores in North America, Vietnam, Malaysia and China.
Jollibee predicted it will become profitable again in 2021 and have a growth rate of 15% in 2022 if the country does not reimpose lockdowns.
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