MANILA - Gains by arch-rival McDonald's and the government's new rules on labor contractualization threaten Jollibee Foods Corp's dominance in the fastfood industry, analysts said Tuesday.
Jollibee's stock price declined to its lowest level in 18 months on Monday, for a fourth straight day of losses. It recovered on Tuesday, up 0.88 percent to P183.70 in early trading.
“Our latest consumer survey shows that McDonald’s has been closing in on Jollibee in terms of preference,” Macquarie analyst Karisa Magpayo wrote in a report, according to Bloomberg.
Homegrown Jollibee holds the distinction of having beaten McDonald's in the burger wars, even as the US fastfood giant dominates the rest of the world.
Golden Arches Development Corp owns the master franchise of McDonald's in the Philippines.
McDonald's is in a better position to pass on the rising cost of raw materials, since its customers belong mostly to the middle and upper income segments, according to the Macquarie report.
COL Financial analyst Andy dela Cruz told ANC he had a "hold" recommendation on Jollibee shares.
"JFC is facing a lot of risks, particularly on its costs and the end of contractualization," dela Cruz told ANC's "News Now."
Dela Cruz said Jollibee's shares were also overpriced compared to its rivals.