Lyceum of the Philippines University Manila

PANDEMIC STRIKES JOLLIBEE FOOD CORPORATION

Wong, Niña Vianca L.

Yumul, Rex M.

Supply Chain Management in the Hospitality Industry

Prof. Shamaecha M. Batabat

October 2020
Pandemic strikes Jollibee Food Corporation

The start of 2020 has shocked a lot of us with the spread of a deadly virus from

Wuhan, China. Many people are not ready with what this virus has done. Every single

person on earth, rich or poor, was affected by the pandemic. On the middle of March

2020, the Philippines heightened its restriction to contain the spread of the virus. This

lead to economic shut down for almost 24 hours each day. One of the affected sectors

was the hospitality industry; in line with this were the food and beverage companies.

Jollibee Food Corporation is one that has greatly affected by the pandemic due to

nationwide store closure for almost 3 months. This prompted a ₱12-billion total net loss

in the first quarter of 2020, and bringing about a 48.4% decline in second quarter

costing ₱30.7 billion loss.

The unprecedented challenges brought by the pandemic have never stop the

business owners to cope up with the situation. Since most people are locked up on their

own houses, the only thing that makes us connected is the technology. That’s why,

business owners started penetrating the online market to boost their sales and recover

their losses. More and more people are using food delivery apps since its more

convenient and the safest way possible to get your cravings at the comfort of your own

home. The end of pandemic is unpredictable and we should be able to adapt living in a

COVID-19 environment. One is making sure that the employees’ and customers’ health

and safety is the top most priority of the company. Two is observing that the minimum

health standard is practiced. Third is to maximize profit through available means and

utilizing the advancement of technology to strengthen the business. But despite these

challenges, we firmly believe that we can overcome all of this as one nation.
Background

Jollibee Food Corporation is the biggest food chain in the Philippines, with more

than 1,150 stores from one side of the country to the other. A predominant market

pioneer in the Philippines, Jollibee appreciates the lion's share of the local market that is

more than the wide range of various global brands joined. Consumer satisfaction has

consistently been critical to Jollibee's success. Never dismissing its objectives, Jollibee

has become one of the most perceived and profoundly favored brands in the

Philippines. Presently the market chief among cheap food chains in the Philippines,

claiming a market share that aggregates to the greater part of the whole business.

System wide store terminations due to the coronavirus pandemic prompted a

₱12-billion total deficit in the first 50% of 2020 for Jollibee Foods Corporation. Half of

Jollibee stores overall were briefly shut during the second quarter, bringing about a

48.4% decline in deals to ₱30.7 billion, appeared on its budget summary. Before the

finish of the quarter, 88% of stores had returned in a restricted limit and provided food

generally to delivery and take outs. With no dine-in customers, incomes fell by 46.6% to

₱23.3 billion in the second quarter. On a year-to-date premise, incomes fell 25.3% to

₱62.8 billion, while deals fell 24.5% to ₱85.8 billion.

Eventually, Jollibee Foods Corporation does not want any more losses so they

come up with fresh ideas. Amidst this pandemic they made sure that even if they open

their stores nationwide, safety of their customers and staffs is their top most priority.

Heightened in-store safety measures were properly implemented like, sanitizing the
shoes, requirement of wearing a face mask and temperature check. In addition,

protocols requires wearing face shield, and gloves by the crews since they are dealing

with handling of foods. While other work force are needed to some areas and

equipment of the store particularly disinfecting the tables and entryways every 30

minutes to accomplish the greatest safety of the clients.

Aside from this, there are news circulating online where Jollibee offers ready to

cook meals like their famous chicken joy, pies, beef tapa, fries, etc. It is a good way to

start catching up to this new normal since not all the customers can go and dine-in to

their physical stores.

Evaluation of the Case Analysis

In these unprecedented times, no one knew when the pandemic will ends. Due to

the sudden lockdown all over the country, all the people were shocked and are not

ready for the upcoming events, and there was no exception even with the small and big

businesses like Jollibee Foods Corporation. The profit of the corporation is deeply

affected since they are not allowed to open their business. It is because the government

wants to minimize the contact between the people and make sure that they will not go

out for leisure purposes only.

The corporation did not meet the demand in line with the supply for their food

inventory. As a result, even if they were not allowed to operate and offer dine-in, they

must think of other plans on how to operate again. In managing their inventory, JFC is

using the FIFO (First-In, First-Out) method, in which the assets acquired first are sold,
used or disposed first. It is an effective method to avoid having their stocks from being

expired, getting old and stagnant. During ECQ, where operations are limited to

deliveries and take-out only, they came with an idea to sell ready-to-cook food to

deplete their stocks. Their take-out and drive thru service were up during those times.

As GCQ comes, the government ease the restrictions by allowing 30 capacity for dine

in customer, given that the establishment must follow strict minimum health standards.

According to Tanmantiong (CEO of Jollibee), “We do recognize that the COVID-

19 pandemic has brought shifts and lasting changes to consumer behavior, such as the

greater use of digital, work from home, and more reliance on delivery and takeout. That

is why JFC has embarked on a Business Transformation to address the changing

economics of our business across the globe, especially in our largest markets – the

Philippines, North America, and China”. As of end-June, Jollibee works 3,286 stores in

the Philippines, particularly with 50-75% dine-in capacity now permitted. The

corporation is thriving to get up and recover their loss, and they are expecting that JFC

will develop in any event in accordance with its historical development growth rate of

about 15% every year.

In a study conducted by Rakuten Insight in the Philippines last June 2020 with

14,034 respondent ages 16 years old and older, 57 percent of the respondents ordered

more through food delivery apps during the COVID-19 pandemic and only two percent

of the surveyed respondents have never used any food delivery apps.
 Retrived from Rakuten Insight. Food delivery apps usage during COVID-19 Philippines 2020

Based on another online research study by Statista, the online food delivery market in

our country is worth around P11 billion with almost eight million Filipinos using the

service at least once since 2018. With this numbers, we could clearly say that a lot of

Filipinos have adapted to the advancement of technology. JFC has its own delivery

website and app, but still they manage to partner with the third-party food delivery

aggregators to maximize their profit. A research conducted by Kantar TNS in 2018

shows that most of the Filipinos use third party app to their order food. They found out

that Filipinos use GrabFood more often than other food delivery platform because of its

reliability and speed of service.

 Retrived from F&B Report. Filipinos’ preferred food delivery platform

In an interview with JFC Chief Executive Officer Ernesto Tanmantiong, he said

that “The pandemic has brought times of unprecedented change, the company’s long-

term growth strategies, vision, mission, and values remain the same, while cognizant of

the need to adapt to changing consumer habits.” He said that they’ve recognize that the

COVID-19 pandemic has brought shifts and lasting changes to consumer behavior,

such as the greater use of digital, work from home, and more reliance on delivery and

takeout. He then added that the JFC has embarked on a Business Transformation to

address the changing economics of their business across the globe, especially in their

largest markets – the Philippines, North America, and China.

As part of its P7 billion business transformation, the company will focus on

building its off-premise channels such as delivery, drive-thru, and take-out.

Proposed Solution and Changes

To overcome the net loss of JFC they must came up with a concrete plan and

solution. Adapting to our current situation we proposed the following:

 Maximizing and utilizing the technology – Today’s generation is the age of

modern technology, everything seems so easy with the help of technology. There

are almost 4.57 billion active internet users across the globe. With this much

numbers, we could assume that most of us have access to the modern

technology. Having a reliable platform that will help you communicate with your

valued customer is pivotal for your business survival. Currently, we have

telephone and phone deliveries, in which you just have to dial the number of the

store to order. We also have a much integrated way with the help of third-party

apps like Grab Food, LalaFood, FoodPanda and as such, but the operation is

limited depending on the location. Jollibee itself has a website and an app where

you can see directly their menu and from there you can directly place an order.

You can also track your order through their website or their app as long as you

have an account. Signing up for an account is free and easy. This is as well

subject to availability depending on the location of the customer. They also have

cut-off time in receiving orders as operation outside Metro Manila is limited on

certain period of time. Most people are staying at home, as most of us are

working and/or studying at the comfort of our home. Utilizing the technology to

reach out the customers staying at home will boost their sales. The down side is,
 they have a lot of competitors online as more and more businesses are engaging

with this strategy.

 Prioritizing the customers’ and staffs’ safety and well-being – As most of the

area in the Philippines are now on GCQ, it means that more stores of JFC can

accommodate dine-in service. But before that, they must regain the trust of their

customer and assure them that they are safe to dine in at their restaurant. To do

that, the company must ensure that their employees are healthy and keep them

healthy. They may provide support to their employees like giving them hazard

pay or allowance for their daily vitamins to boost their immune system. The

company may provide a private shuttle service as well to their employees, or they

may provide a shelter or housing for their employees. The company may provide

support to their employee who got sick because of Covid-19. To ensure

customer’s safety, they must follow the strict health protocols set by the IATF and

the local government unit.

 Well trained staff in accordance with the safety protocols – As we adapt to

the new normal, training must be given to the employee to ensure their safety.

The staff should know how to properly disinfect their workstation and the areas

that is highly contagious for the virus to spread; public spaces like the dining

area, restrooms, entry and exit point. The staff must know when to disinfect a

certain area; for example the door must regularly disinfected after the use of

each customer, the hallways should be disinfected every 30 minutes, the counter

should be disinfected every after each customer. The staff should know the

minimum health standard set by the government and strictly observe this
 regulation inside the store. Face mask and face shield should always be worn,

except when times of eating. Sanitizers should be accessible to the customer.

Temperature check upon entry is a must. This simple step must be regulated at

all times.

 Leverage resources – Every sector in the economy was affected by the

pandemic – farmers, suppliers, operators, owners and staffs. As most of the

ingredients in food industry are perishable, we don’t want to waste money and

resources. When the businesses shutdown during ECQ, where only takeout and

delivery service was available. They came up with the idea to sell their stocks to

their customer by selling their ready-to-cook meals. This idea is wise to lessen

wastage of ingredients. Now that the operation is almost back to normal, the

purchasing officer must carefully look out for their stocks. We don’t want to stock

too much and end up getting wasted. The supply must go with the demand.

Smart management can lessen the possibilities of net loss.

 Protecting the brand – Jollibee is a reputable brand in the Philippines. It is one

of the favorite fast food restaurants of all ages. But how can they protect their

brand amidst pandemic? Think about how you can communicate well with your

customer. Satisfy their cravings of their most loved product of yours. Ensure the

quality of the product you’re giving. Sharing them how they could cook your

ready-to-cook meals through vlog. Simple gestures that will make your customer

feel special. Remember, everyone is having a hard time during this pandemic;

customers will be quick to judge on how we react.

Recommendation

Jollibee Food Corporation should continue to take care of their online customers.

No one knows when will this pandemic would end, and no one knows if the pre-covid

situation would go back. As most of us are reliant to online services, the JFC should

continue on holding their customer through online. Since JFC recently launched its own

delivery app and website. We recommend them to have a faster delivery service, just as

what the third party delivery company can do. They may also give discount coupons

online, just like they used to in their physical stores. They should have seasonal promos

applicable both on the third party delivery aggregators and on their own. Have family

and group meals available for takeout, delivery and drive thru and for food delivery

apps.

The store manager should be able to monitor the stocks of the store; otherwise, it

would be another loss for the company. Since JFC are selling perishable goods, stocks

must be wisely consume and sold on time.

In this time of health crisis, the business should not stop. Even the pandemic has

crushed other sectors of the economy, we should rise up again and rebuild as one

nation. Supporting a local brand like Jollibee will help boost our economy again. But, we

should not neglect one’s safety and well-being; it should be the top most priority of the

businesses right now.

References

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unprecedented-change/

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https://businessmirror.com.ph/2020/09/16/the-all-new-jollibee-app-makes-ordering-your-

favorites-faster-and-more-convenient/

Kantar TNS (2018). Survey: GrabFood is Filipinos’ preferred online food delivery

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https://www.hospitalitynet.org/opinion/4097545.htmlhttps://www.hospitalitynet.org/opinio

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