Amid the government’s push to develop previously neglected regions in the country, Shakey’s Pizza Ventures Inc. (SPAVI), which operates the Shakey’s pizza chain in the Philippines, is eyeing to open more branches in the Visayas and Mindanao, the company’s President and CEO Vicente Gregorio told reporters on Thursday, July 20.
“We think there’s a lot of opportunity in the Visayas-Mindanao region. If you look at the data, all together, we only have around 16 VisMin branches out of the 180,” Gregorio said in a press conference after the listed company’s stockholders’ meeting. He said the company is planning to build a total of six more branches in the two island groups this year, the most in recent years.
“In the last count, we have four identified [branches] and two more on the way [in the VisMin region]. We have to be very careful in making sure not just to open in the first possible location,” Gregorio explained.
He said the company is looking at Roxas City and the province of Aklan as potential growth areas.
The pizza chain is opening 20 new local branches this year compared to 17 branches last year, bringing the total number of branches to around 200 by yearend. In the past few years, it built an average of only 12 stores per year. As of March 2017, the company has 189 branches. Its branch sizes range from 400 square meters for its legacy stores to 120-250 square meters for its stores inside shopping malls.
SPAVI, which went public in December 2016, is the holding firm that owns the Shakey’s trademark and licenses in the Philippines and Asia (except Malaysia and Japan), China, Middle East, Australia and Oceania. The company is jointly owned by the Po family’s Century Pacific Group Inc. (CPGI) and GIC Private Ltd., the sovereign wealth fund of Singapore.
The Shakey’s business in the Philippines used to be controlled by the Prieto family through International Family Food Services Inc. (IFFSI). After the Prietos sold their majority stake to Century Pacific Group and GIC Private Ltd in March 2016, IFFSI was renamed SPAVI. The Prieto family still retains a three-percent stake in the renamed company.
Shakey’s accounts for 27.2 percent of the pizza chain market in the Philippines, making it the biggest player. However, Greenwich, which has a 24.3-percent market share, and Pizza Hut, with a 23-percent market share, are close behind.
The company posted a 26-percent year-on-year net income growth for the first quarter with Php173 million from Php138 million in the same period last year. The surge was driven by the company’s stronger system-wide sales, which grew from Php1.6 billion to Php2.0 billion by March 2017.
However, the company is expecting growth to slow down by yearend with the depreciating value of the peso and higher costs of raw materials. The peso closed at Php50.82 on Thursday, July 20, its worst finish in more than a decade.
“Our peso continues to weaken and there are several uncertainties going on. We have increased competition also that force prices up [and] we’re just preparing for the worst case,” Gregorio added. “Already, we are producing some of the healthiest margins but we believe there’s still room to be more efficient.”
Elyssa Christine Lopez is a staff writer of Entrepreneur Philippines