Pinoy businesses bullish amid Brexit anxiety
Bee-fore the launch: Jollibee's London franchise in Earl's Court sits quiet a few days before its launch. Jollibee is Asia's biggest food brand, and its London franchise is its first foray into the British restaurant market. It's launch comes months before the UK leaves the European Union. Photo: Nathaniel Melican
LONDON, 19 OCTOBER—It’s Friday morning, and passers-by along Earl’s Court Street in the west end of London are trying to get a peek inside the first-ever branch of Filipino fast-food chain Jollibee in the United Kingdom, also the newest addition to this high street that already has a McDonalds, KFC, Nando’s and Burger King.
Jollibee is launching at an auspicious place—Earl’s Court, considered by Filipinos as their own quarter in London. But its public debut on 20 October might be overshadowed by the so-called People’s Vote March, where around 100,000 people are expected to protest in London’s streets demanding a referendum on the final deal on leaving the European Union (EU).
The march highlights the frustration, divisions and uncertainty that the UK is now facing with just six months to go before it leaves the EU on 29 March 2019. However, this uncertainty, which shook London’s financial markets in the aftermath of the Brexit vote in 2016 (the pound fell six percent against the dollar in one day), does not seem to faze Jollibee.
Outside Jollibee, security guard Vic, dressed in a sleek suit, is letting no one in. It is the eve of the fast-food restaurant’s launch, and the company’s executives, who flew over from the Philippines, are hosting closed-door pre-launch events.
Vic says the hype on Jollibee and its signature Chickenjoy fried chicken seems to be catching on. “I’ve probably turned away 50 people this morning, including some Brits. They were all very eager to taste Chickenjoy, but they’ll have to wait one day more,” he said.
In regulatory filings, the company, valued at around P282 billion (£4 billion), said it envisions 50 Jollibee restaurants in Europe and 25 more in Britain in five years’ time. Jollibee, which began as an ice cream parlour in the Philippine capital of Manila in 1975, is the biggest Asian food brand. Its flagship fast-food chain has a combined 1,307 stores in the Philippines and worldwide, part of the 4,279 stores it operates across the 14 brands it owns.
Jollibee officials were not available to comment for this article, but for Rommel Romato, consul for economic affairs at the Philippine Embassy in London, Jollibee’s arrival in the UK amid Brexit should be taken as an encouraging sign.
“I think that Jollibee’s arrival in the UK means that they see opportunities to be seized here, and that in spite of Brexit, they are confident of eventual success in the British market,” Romato said in an interview.
Jollibee is far from the only store catering to Filipino cravings in Earl’s Court. Down the road, Gary Farochilen’s Tindahang Pinoy—literally Filipino Store—is one of three Filipino stores in the area. These stores stock a huge range of products from the Philippines, from crisps and biscuits, sardines and meat loaf, seasonings and spices, toiletries, and even fresh produce to cure homesickness whenever it strikes.
Farochilen, 63, is quietly confident that Brexit will not have much of an effect on his business, which he runs together with his wife Bebot. They took over the business when it was offered to them in 2008, quitting their jobs and taking out loans to cover the expenses. They have paid their debts off, and while there are losses some days, the business is thriving, so he does not let Brexit bother him too much.
“I believe Brexit will not have a huge impact on our store,” Farochilen said. “Apart from a potential increase in the prices of our imported goods, I doubt it will hit our business hard.”
It is this impact on retail prices that causes concern among experts like Dr. Shishank Shishank, a lecturer of business operations management at the Centre for Brexit Studies at Birmingham City University.
“High street retail store owners typically get supplies from wholesalers in the UK, which imports commodities from around the world. Once Brexit takes effect, they might encounter higher tariffs and other import costs,” he said in a telephone interview.
“Who will bear these costs? Will wholesalers and retailers absorb the costs? Or will they pass it on to the consumer? At the moment, we cannot see the impact, and I don’t think retailers can easily plan for this,” Shishank added.
While he admits that the answer to this problem will not become clearer unless a Brexit deal passes muster in both the UK and Europe, Shishank says that retailers should now focus on windows of opportunity that Brexit can open, instead of the doors of windfall that could close.
“Until now, everything is coming from Europe. Everything has been easy to get. If sourcing their products becomes an issue, businesses will have no choice but to develop new capabilities and new sources of products,” he said.
Romato, who analyses political and economic developments in both the Philippines and the UK for the Philippine Embassy in London, is hopeful that Brexit will give Filipino businesses in the UK opportunities and advantages that might not have opened up otherwise.
“The UK will be keen to develop good trading relationships with countries outside the EU, like us, because it is in their economic interest to do so. This is already happening—UK officials are approaching us more. Filipino companies, and Filipino businesses in the UK, should take a look at the good that can come out of this,” he said.
For his part, Farochilen is already aware of the benefits that Brexit may bring to his business.
“It might now be possible to import some classic Filipino favourites. Things like corned beef and liver spread, which our wholesalers are having trouble importing under EU rules, could become widely available soon,” he said.
Meanwhile, at Jollibee Earl’s Court, Brexit is the least of security guard Vic’s problems. Based on his own enquiries, he claimed that the London franchise sources most of its ingredients from the UK, so he thinks there would be little disruption.
Even today’s People’s Vote March is not his priority, when he knows people could end up queueing for nine hours before they can order, just like what happened when Jollibee opened its store in Milan, Italy in March.
“All I know is we’re expecting a deluge of people tomorrow, especially as we’re giving free Chickenjoy to the first 100 people in line,” he said.
But can Chickenjoy really trump Brexit? Only time will tell.#####