SEA CHANGE
The operator of Zen Japanese restaurants trimmed its investment budget by 60% this year as the economy weakens.
The virus outbreak has prompted Zen Corporation, the operator of Zen Japanese restaurant, to revise its investment plan, slashing investment budget by 60% this year and shifting focus from premium brands to affordable ones.
Boonyong Tansakul, the company’s chief executive, said the company’s investment budget would be trimmed to 80 million baht this year from 200 million, with only 40 new restaurants for planned this year, about 50% lower than previously planned.
He said the food business at malls and at tourist destinations has declined by 15-50%, depending on the location, during the first two months of this year because of the pandemic.
Of the 40 new branches, about 30 branches will be under Khiang, a street food brand, with 10 eateries under the Mucha and Din’s brands. The revised plan gives Zen Corporation 390 branches.
Mr Boonyong said the outbreak has made consumers more cautious about going out and has significantly reduced foreign tourists.
The slowdown is expected to last until the middle of the year, he said.
“We have found the delivery and retail f ood business, particularly ready-to-cook food such as fried noodles and ready-to-eat food such as fermented fish chilli dip, northeastern dipping sauce and chicken dipping sauce, have been growing well,” said Mr Boonyong.
Consumers are ordering more takeout food or eating at home.
Zen will emphasise sales from delivery channels as demand during the first two months of this year has grown by 2-3 times over the same period of last year, he said.
As part of expanding the delivery business, the company will modify kitchen areas at Zen-branded Japanese restaurants to serve as central kitchens for delivery business for restaurants in the ZEN Group. This will start with five Zen restaurants in the first phase from tomorrow at Donki Mall Thonglor, Siam Square One, The Mall Bangkapi, The Jazz Wanghin and All Seasons Place.
At least 100 branches for the Khiang made-to-order restaurants will be opened with no less than 100 branches this year under the collaboration and franchise strategies.
The company has cooperated with Haadthip a local bottler of Coca-Cola brand in 14 southern provinces, to set up a joint venture firm, Gindee Yoodee 2020, with Haadthip holding a 75 % stake through Haad Thip Food & Beverages.
ZEN Corporation holds the remaining 25% through ZEN & Spicy.
“This cooperation is one of the major strategies to expand Khiang restaurants to various regions while also being able to exchange knowledge and experience with our partners to improve our ability to quickly increase the branches in the South to cover all areas. Our target is to have Khiang restaurants open for business in all provinces in the southern region,” Mr Boonyong said.
By pursuing these strategies, the company expects sales to grow by 5% this year from 3.1 billion baht last year.