Jollibee, the Philippine fast food chain that opened its sixth outlet in the UAE last week, is eyeing another six openings this year.
The newest outlet is on Al Falah Street in Abu Dhabi, joining its first outlet in Mushrif Mall.
While many parts of the food and beverage (F&B) sector are struggling with a softening economy, and the exponential growth of F&B outlets, this joint venture is enjoying strong support from the expatriate Filipino community, and is targeting a lower price point as a key differentiator.
“Our most popular dish is ‘Chickenjoy’, which sells for only Dh18,” said Dennis Flores, the vice president for international markets at Jollibee.
He said pricing below other chicken restaurants such as KFC was crucial to the brand’s growth. “We opened our first restaurant in the UAE in May 2015 and we have been humbled by the amount of support from the Filipino community. We expect to open between 20 and 30 stores in the UAE over the next three years. The faltering economy is a boon to our business because of the value pricing, and the softening of real estate prices allows us to negotiate better deals for rent.”
The dip in the economy, combined with the growth in the F&B sector, has caused an oversupply according to one industry expert. Figures from Euromonitor International showed there were 16,720 F&B outlets in the UAE at the end of last year, with 19,000 outlets expected by 2020.
“Jollibee knows its business and its customers but you need to sell a lot of chicken at Dh18 to make a profit,” said Naim Maadad, chief executive of the hospitality development company Gates Hospitality. “I think there are too many concepts fighting over the same customers – 2017 will be a very tough year for the F&B sector.”
Mr Gates said Jollibee needs to be in high-footfall areas for its business to work. Its affinity with the Filipino community will serve it well as there will be many Filipinos coming to the UAE to work in the run up to 2020. The loyalty of the Filipino community to its native foods has seen other concepts tap in to the taste.
Ortego’s Deli opened in the capital in 2014 and now has four outlets in Dubai and Abu Dhabi. The cosmopolitan demographic of the UAE allows many concepts to flourish if they service an underserved community.
“We targeted the Filipino community because I saw there were not many Asian restaurants in Dubai and Abu Dhabi,” said Philip Chan, the managing partner of Ortego’s Deli. “The pricing is crucial to gain footfall. Our average ticket price is Dh40, we cannot charge higher, and that has kept business relatively steady.”
Mr Chan, however, added that having noticed the contraction in the economy, they were in no rush to expand. “There does seem to be fewer expatriates eating out nowadays. We believe we have grown at the right pace and will consider expanding when the economy turns.”
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