Struggling Second Cup plans redesigns
After another tough quarter, Second Cup hopes coffee drinkers chasing their java fix will get behind the company’s new loyalty card this spring.
The chain plans to expand “Perks from Second Cup” across the country in the coming months after a test run in Calgary. The program will allow users to accumulate and redeem points for every dollar spent through either a plastic card or smartphone app.
The rewards launch is part of a three- year turnaround plan that chief executive Alix Box hopes will change the perception of the brand.
“We’ve taken it to a much more premium type of experience,” she said in an interview. “I felt the brand was playing way too much in the middle.”
During the fourth quarter, the Second Cup Ltd. posted a net loss of $ 469,000 or four cents per share, as it booked a $ 391,000 provision for café closures and a $ 692,000 item for acquisition of some franchise cafés.
A year earlier, the franchisee operator turned a profit of $ 1.2 million or 12 cents per share in the same period, even with restructuring charges and a provision for store closures. Fourth- quarter revenue was $ 8.4 million, up from $ 8 million a year earlier, while sales within its café network fell to $ 49.4 million from $ 51.9 million.
Same- store sales at locations open at least a year were down 3.9 per cent in the fourth quarter and down 4.7 per cent for the full year, while the number of cafés as of Dec. 27 was 347, down from 356 a year earlier. Second Cup has been trying to overcome an identity crisis that stunted its growth just as a barrage of new competitors entered the market about four years ago.
Box joined the top ranks of Second Cup a year ago as part of an effort to turn around its eroding market share in an already pressured coffee business.
In December, Second Cup launched a key part of that plan by opening a store in downtown Toronto that had a new look and different approach to making coffee.
“Once we’re really satisfied with it, then we will roll that ( design) out to new cafés and cafés that are under renovation,” Box said.