McDonald’s PHL franchisee to spend P2B for new stores

THE EXCLUSIVE franchisee of the McDonald’s brand in the Philippines plans to spend up to P2 billion for the rollout of at least 40 new stores this year, following the double-digit growth in sales the company booked in 2017.

In a statement on Thursday, Golden Arches Development Corp. (GADC) said the capital spending will also cover other growth initiatives centered on customer experience, value, and convenience.

“We are confident that our expanded presence will also spur employment in our new areas of operations. By opening more new restaurants, we will be able to generate jobs and provide world-class training for thousands of young Filipinos. We also enhance economic activity in areas where we will be present,” GADC President and Chief Executive Officer Kenneth S. Yang said in a statement.

Last year, the company opened 52 new stores, piercing through new territories such as Antique, Sorsogon, Masbate, and San Francisco, Agusan del Sur. This brought the number of McDonald’s stores in the Philippines to more than 570, employing around 60,000 regular employees in the process.

The store openings pushed up the company’s system wide sales to P42.6 billion in 2017, 14% higher year on year. GADC further attributed the positive performance to innovations in its menu offerings and local store marketing activities.

The company noted that it also delivered a double-digit growth in earnings for the year, but did not disclose the actual figures. GADC previously reported that net income in 2016 stood at P1.2 billion, on the back of revenues worth P22.6 billion.

The chain of quick service restaurants (QSR) is also working on expanding its market share with the use of its delivery system, McDelivery, as well as on focusing on customer experience and the sustained demand for its products.

“Alongside expansion of our physical stores, we see e- commerce as another strong source of incremental business growth as our delivery service has been growing year on year. We’re proud of our gains in McDelivery as the first QSR to have an online delivery site in 2009 and an app in 2014,” Mr. Yang said.

GADC is part of tycoon Andrew L. Tan’s Alliance Global Group, Inc. (AGI), as the group holds a 49% share in the company. Mr. Tan’s other investments include property through Megaworld Corp., liquor through Emperador, Inc., and gaming through Travellers International Hotels Group, Inc.

GADC’s earnings grew 19% to P977 million in the first nine months of 2017, amid a 13% increase in sales revenues. Meanwhile, AGI’s attributable profit dropped 8% to P10.2 billion during the same period, amid revenues of P100.3 billion.

Shares in AGI added 14 centavos or 0.94% to close at P15 each at the stock exchange on Thursday.