Fastfood group Restaurant Brands has revealed financial results for 2000 and some new strategies for its pizza and coffee shop businesses.
For the full year ending 30 November, group CEO Jim Collier told the annual general meeting today that the Eagle Boys pizza chain acquired last year was profitable. “We are pleased to report that margins have recovered well. We had achieved 11% margins by the end of the first quarter of 2001 and our target is to average over 12% for the 2001 year,” he said.
Sales in the 53-strong chain amounted to 20.4% of total group sales, reaching NZ$47.8m, and while revenue had actually dropped by 15% since the conversion of the outlets to the Pizza Hut brand, the chain is on an “improving track.” Collier explained: “Eagle Boys had some customers who were not fans of Pizza Hut and who were unlikely to convert. We have now recovered a large proportion of those.
“As of February 2001, Pizza Hut was serving the same number of customers each week as the combined Pizza Hut and Eagle Boys served prior to the acquisition,” he added, commenting that sales will be further boosted by the serving of wine and beer to home delivery customers, due to start in June.
The group’s plans for this year also involve rolling out more Starbucks outlets than previously expected. Collier explained, “We believe the opportunity for sustained growth in Starbucks is significant. By the end of 2003, we expect to have 50 stores. Yet at that point, Starbucks will have only a 6% share of the New Zealand cafe market.”
“We believe there is potential to expand beyond 50 stores and 6% market share. It is probable that the company will continue to open stores after 2003 and we will evaluate the scale of the opportunity in the next 12 months.”
Sales from the 17 Starbucks outlets currently operated by Restaurant Brands reached NZ$10.4m during the last full year, representing 4.4% of total company sales. During 2001, 13 new stores will be opened and Collier explained: “Our experience in the first quarter of 2001 indicates that [goals to increase margins and same-sales] will be achieved. Same store sales were up 9% and margins were higher than the second half of 2000.”