Burger chain opts for profit push
Fast-food company Restaurant Brands says it will offer few discounts at its Carl’s Jr burger restaurants and focus on increasing the chain’s profit margins.
The listed company, which also owns Starbucks Coffee, KFC and Pizza Hut in New Zealand, reported a $19.1 million profit after tax for the half-year to September 11, up 41.3 per cent on the same period last year.
Total group sales were up 50.7 per cent to $386.1m.
But Hamilton Hindin Greene retail analyst Grant Williamson said the result was short of expectations.
‘‘I wouldn’t be critical of that result. It was a very good result, but analysts were expecting a touch better than that,’’ he said.
Williamson said Restaurant Brands took a cautious approach to expansion and would focus on burger restaurant Carl’s Jr in New Zealand before expanding further.
Sales for Carl’s Jr and coffee brand Starbucks were both down almost 3 per cent. Restaurant Brands said this was due to two Carl’s Jr stores opening in Christchurch last year.
Restaurant Brands said it would reduce discounts and promotions at the chain and would focus on increasing profit margins.
In September, Restaurant Brands opened a $1.6m KFC restaurant in Fort St, downtown Auckland, with a new format, self-serve kiosks and no drivethrough.
The company said the store was so successful it would be a prototype for new central city stores in 2018.
‘‘This is a typical example of a company taking things quietly before further developing a concept,’’ Williamson said.
‘‘I certainly think they will be expanding self-serve kiosks in other stores.
‘‘It won’t necessarily reduce staff numbers but … it could increase sales at better [profit] margins.’’
New Zealand Pizza Hut store profits were down $400,000 due to higher wages and higher ingredient costs, but sales were up.
In June, Restaurant Brands workers around the country won a pay rise of between 60 cents and $1 an hour, backdated to April 1.