Decline in consumer spend weighs on Taste Holdings
SALES growth of 6% from Taste Holdings’ fast food outlets failed to offset a 15% drop in sales from its jewellery stores, dragging the group’s interim revenue down 9% to R483-million.
Taste said in its results for the six months to end August, released yesterday, that after “inter-segment eliminations” had been accounted for, its food division’s revenue declined by 1%.
“Any operational gains made during the six months have been overshadowed by the brutal and sustained decline in consumer spending across almost all categories that the group trades in,” chief executive Carlo Gonzaga said.
Before inter-segment eliminations, food revenue grew 6% to R282-million while jewellery sales fell 15% to R253-million.
The jewellery division swung from a pretax profit of R14-million in the matching period to a loss of R9-million. The food division’s loss widened to R71-million from R64-million.
The group’s overall after-tax loss nearly doubled to R66-million from R34-million.
Taste recently abandoned plans to sell its jewellery division, whose brands include NWJ, Arthur Kaplan and World’s Finest Watches.
Taste grew the number of corporate-owned stores to six Starbucks and 63 Domino’s, giving a total of 69 – more than double the prior year’s 34.
“Our efforts to improve the value proposition, combined with increased marketing spending, have met with limited success and certainly have not been enough to counter the current sales cycle,” Gonzaga said.
Taste Holdings shares traded down 4.3% at 89c in early trade on the JSE yesterday. – BDLive