ORTIGAS CBD Pasig City Philippines — Jollibee Foods Corp. the largest fast-food business in the Philippines is expanding its reach into the U.S. market by opening five more outlets.
At the same time the Manila-based enterprise which has more stores in the Philippines than U.S. hamburger giant McDonald’s is hopeful that it can add more branches on Guam to take advantage of the arrival of some 8 000 U.S. Marines and their families from Okinawa Japan expected to arrive beginning 2009.
In an interview with the Journal Tommy King vice president country head Jollibee and Red Ribbon USA Operations; said “Jollibee USA plans to open five new stores in 2007 — Jollibee Las Vegas [opened May 2] Jollibee San Bruno and Vallejo California will open around September or October and Jollibee Sacramento and in the Panorama Mall [in Panorama City Calif.] by December.”
Jollibee Las Vegas is the 12th store of the fast-food outlet in U.S. mainland. It is a partnership with Seafood City a grocery chain specializing in Filipino food items owned by the Filipino-American Go family.
King said he was optimistic about the prospects of Jollibee in the U.S. where McDonald’s and Burger King are the dominant players in the hamburger/fast-food industry. He is banking on the huge population of Filipinos as well as tapping the growing Hispanic market. “[In deciding on the branches’ locations ] we primarily target the Filipino population. Second we are focusing on the Hispanic community and after we hope the mainstream [Americans] will join the excitement in visiting our Jollibee stores.”
For the first time since Jollibee opened its first outlet in Daly City on May 29 1988 the U.S. operations posted a profit of 50%-60% in 2006. “Jollibee USA has achieved our first taste of profit in the year 2006. Our sales are growing by double digits too ” King said. He credits the stores’ success to “our people our langhap sarap [delicious smelling] products excellent/friendly service and cleanliness of our stores.”
While the U.S. operations earlier toyed with a hodgepodge of Filipino and American meals Jollibee finally decided not to tweak its tried and tested menu in the Philippines focusing on Filipino favorites like its Chickenjoy (deep fried flour-coated chicken with a crispy skin) its Champ Aloha and Yum burgers Jolly Spaghetti Palabok Fiesta (rice noodles in shrimp sauce topped with crushed deep fried pork rind) and desserts like the Peach Mango Pie and Halo-Halo (frozen dessert with mixed fruits nuts and milk). About 800 diners are estimated to pass through Jollibee’s doors in the U.S. daily.
To attract the Latin American and mainstream consumers King said “This May we are coming up with new side dishes to enhance our famous Chickenjoy to make the trial visits of the Hispanic and mainstream [U.S. customers] more exciting. We have salsa mashed potato and buttered corn as well as adding breakfast items like a pancake sandwich and Jollibee muffin sandwich.”
While things are looking up in the U.S. mainland the Guam and Saipan outlets primarily operated by franchisees are suffering from the islands’ sluggish economies. Only one store is operating on Saipan the Garapan branch while measures are being taken by Manila-based company experts to assist in Guam sales.
According to Dennis M. Flores vice president country head Jollibee Middle East and concurrent head of Vietnam Brunei Hong Kong and Saipan “We closed one store in Saipan and consolidated our sales in JB-Garapan. Saipan is such a small market. We look forward however to reopening our second store in the future. In Guam we are in close talks with the franchisee to help her boost sales.”
Jollibee on Guam is located at Micronesia Mall owned by Felisa Enterprises.
The outlet on Saipan is owned by the Yumul family who are Filipino-Americans.
Flores also discussed the economic opportunities that would be afforded Jollibee with the transfer of the U.S. military personnel and their families to Guam. “The relocation [of the military personnel from Okinawa] is a big opportunity for Guam. We know the economy is not doing well at the moment and this development is a big boost to business in the island. As I have said we are talking with the franchisee and certainly if business picks up we are looking at opening more stores in Guam.”
He said that while a number of Chamorros appreciate Jollibee’s varied menu of Philippine cuisine-inspired meals “by and large however we still cater to the Filipino population.”
The major strides taken by Jollibee in the U.S. have not gone unnoticed. In the April 9 issue of Time magazine Jollibee was cited as one of the more popular foreign fast-food chains in the U.S. The Los Angeles Times meanwhile in its Feb. 14 issue gave Jollibee’s Amazing Aloha burger [cheeseburger with a strip of bacon and topped with a slice of pineapple] a thumbs up calling it a “real winner.”
A publicly listed company in the Philippines Jollibee’s net profit rose by 18.3% in the first quarter of the year to 531 million pesos [$11.25 million] from 449 million pesos [$9.52 million] in the same period in 2006. Total sales [including subsidiaries Chowking which makes fast-food Chinese dishes; Greenwich pizza and pastas Delifrance breads and pastries and Red Ribbon cakes and desserts] rose 13% to 11.7 billion pesos [$248 million].
Tony Tan Caktiong Jollibee chairman and chief executive officer; said in a May 11 news release “Overall our Philippine stores achieved growth rates that were higher than in the past two years. We attribute the strong growth to a recovery in consumer spending behind an improving economy and to our product launches and marketing campaigns.”
Jollibee has 573 burger stores throughout the Philippines while McDonald’s has 260. System-wide Jollibee has some 1 400 stores in the Philippines and 170 stores overseas including Dubai Indonesia and China.
“In our international business store sales continued to rise remarkably in practically every foreign market and across all our brands. The consumers in our markets abroad are clearly responding to our continued effort in improving our products particularly in product tastes and our services ” Tan Caktiong said. The group has 26 burger outlets overseas located in the U.S. mainland Guam Northern Mariana Islands Hong Kong Vietnam and Brunei.
Tan Caktiong’s success in the Philippines has been well-documented. In 2002 the Economist magazine cited a Taylor Nelson Sofres study that showed Jollibee was the “most often visited” fast-food restaurant in the Philippines. This the magazine concluded “is a huge embarrassment to McDonald’s.” In 2004 Tan Caktiong was named Ernst and Young’s World Entrepreneur of the Year in awarding ceremonies held in Monte Carlo Monaco. MBJ