GOLDEN Arches Development Corp. (GADC) believes 2019 will be another good year for its McDonald’s franchise business in the Philippines due to its steady sales growth, upbeat consumer sentiments and elections in 2019.
“The 2019 senatorial elections will contribute to our sales, but not that much compared to presidential elections,” McDonald’s Philippines Managing Director Margot B. Torres told the BusinessMirror. “It would still be the high consumer take-up of our brand that would contribute much.” Torres said GADC’s McDonald’s business came from double- digit year-on-year sales in the past 10 years. She said the company ended its consolidated sales in November at 13 percent, adding she did not know yet the figures for the third quarter.
Torres spoke to the BusinessMirror after the launch of GADC’s fifth store with self-order kiosks (SOKs), where consumers type onscreen their respective orders before going to the counter.
Torres said GADC plans to end 2018 with 15 stores with SOKs. She said 10 percent of the company’s total stores would have SOKs by the end of 2019, and projected to hit 70 percent of total stores by 2020.
Currently, there are 620 McDonald’s branches in the country. Torres said GADC targets to open 30 more stores before 2019 ends.
GADC has set aside about P2 billion for its capital expenditure this year and plans to spend P3 billion next year.
Torres said the company’s achievements showed how it weathered external factors, including inflation that impacted revenues.
“We’ll never [undertake an] increase above inflation and the consumer price index or a basket of goods,” she told reporters. “Obviously, it’s in the interest of the whole business to stay affordable.”
Torres said there were menu items like those requiring sugar whose prices went up. She pointed to the additional taxes on sugar as one of the culprits.
“We manage our portfolio. You have many items that profit and items you can’t increase because it would be counterintuitive as this would lower demand. And we’re demand-driven,” Torres explained. “There are also items that we committed to retain, like the ‘Happy Meal,’ that have been at P59 for many years before we increased it to P65 because of the sugar taxes. But it’s still at that price range.”
She also admitted the company’s sales were affected when the government decided to close Boracay Island beginning April. The company had to close one of its two stores on the island resort.