- Philippine company to open at least 300 stores globally 2016
- Pace of store expansion at 10% in 2016 from 8% in 2015
Jollibee Foods Corp., which took a stake in the American Smashburger chain last month, wants to buy more fast-food brands in the U.S., China and the Philippines to fire up its global expansion.
The Philippines’ largest operator of restaurants will open about 300 stores globally next year, President Ernesto Tanmantiong said in an interview in Manila. That will boost growth in outlet openings to 10 percent in 2016 from 8 percent this year, he said Tuesday.
“We’re still exploring in the three strategic markets: U.S., China and the Philippines,” he said. “We just beefed up our store development group and we are now ready for faster expansion.”
Shares of the Philippine fast-food company rose as much as 3 percent in Manila before closing 0.8 percent higher. The nation’s benchmark stock index rose 0.8 percent.
Jollibee, whose mascot is a smiling crimson bee in a chef’s hat, bought 40 percent of Smashburger Master units last month. The company wants to appeal to the almost 10 million Filipino nurses, nannies or engineers who work overseas before breaking into the mainstream, Tanmantiong said in a Bloomberg Television interview. Such “diaspora marketing” has brought the cheerful bee to more than 10 countries including China and the U.S.
Sovereign wealth funds and private equity firms have offered to partner with Jollibee and the company may consider acquisitions of at least $1 billion, Chairman Tony Tan Caktiong said in a separate interview on the sidelines of the APEC Summit in Manila. It prefers tie-ups so long as Jollibee maintains control of acquired targets, he said.
Going global helps diversify its sales base. Jollibee plans to get half its revenue from outside its home turf eventually, Tan Caktiong said. Apart from expanding geographically, it may also go into casual dining, he added.
“Its strategy of expanding in areas with a high concentration of overseas Filipinos has worked in other markets, and together with acquisition could help it reach its target,” said Grace Aller, an analyst at Anping & Associates who has an overweight rating on Jollibee’s shares.
The company opens at least 40 stores annually in China, a pace that will quicken once it starts to franchise, Tanmantiong said. It has budgeted 10.4 billion pesos ($220.5 million) for capital spending in 2016, more than 70 percent of which will go toward new stores or the renovation of existing ones.
Jollibee, which started as an ice-cream parlor in 1975, has six brands in the Philippines, including the nation’s biggest hamburger, pizza, chicken-barbecue and Chinese food chains. Profit in the third quarter rose 7.3 percent to 1.26 billion pesos, faster than the 1.6 percent year-on-year increase in the previous three months, according to data compiled by Bloomberg. The company on Nov. 9 said it plans to open stores in Malaysia, Oman, Canada, Italy and the U.K.