Jollibee expects to retain leadership

MANILA, Philippines -  Jollibee Foods Corp. (JFC) expects to sustain its leadership in the local fastfood sector despite the threat of increased  competition from its staunchest rival, McDonald’s.

“The Jollibee brand’s system wide sales in the Philippines are double that of the next largest competitor. Its sales are larger than those of the two biggest foreign competitors combined. The Philippines is one of the very few countries in the world where the largest fast food chain is not a foreign brand but a local brand,” JFC said in statement.

According to latest consumer survey report by Macquarie, McDonald’s has been closing in on Jollibee in terms of preference.

JFC, however, is confident it will maintain its leading position in the years ahead through innovations and improvement in its products, services, store design and network expansion, and communications with customers even as it accelerates its profitable growth abroad.

The fastfood giant said it has been experiencing the highest organic sales growth in at least a decade. Sales grew 14.4 percent even without acquiring a new business.

“In the Philippines, JFC opened the second most number of new stores in its history with 243 new outlets in 2016 after opening 249 outlets in 2015. Same store sales growth in the Philippines in 2016 was 8.3 percent, driven by higher customer traffic and higher amount of purchases per visit per customer compared with a year ago,” JFC said.

Its store network increased 6.7 percent compared to a historical organic network growth of about four percent.

“All JFC’s six brands in the Philippines: Jollibee, Chowking, Greenwich, Red Ribbon, Mang Inasal and the Burger King franchise grew strongly, with each one’s system wide sales increasing by double digit percentage over those of 2015,” JFC said.

JFC said each of its brands is a market leader in its particular food category segment.

 “Total system wide sales in the Philippines grew 15.5 percent in 2016 compared with a growth of 10.8 percent in 2015. JFC’s growth in the Philippines has actually been acceleration,” JFC said.

The group implemented two price increases in 2017 but the price increases did not adversely affect consumer purchase volume regardless of income class.

“Over the past years, the pricing of Jollibee had been at parity with key competitors. As price leader, it has started increasing the prices of some products in 2017 in response to rising raw material prices. For the first quarter of 2017, it is expected that JFC’s brands in the Philippines will continue to have higher gross profit margins versus the same period last year.