Retail News CRM

Tag: Cafe de Coral

  • Cafe De Coral Profits Plummet Amid Economic Fragility; Embraces Strategic Adaptations For Resilience

    Cafe De Coral Profits Plummet Amid Economic Fragility; Embraces Strategic Adaptations For Resilience

    Cafe de Coral, a prominent foodservice operator, has disclosed a slump in earnings, attributing the setback to a frail economy and lukewarm consumer sentiment. The fiscal report for the year ending March 31 revealed a 1.4% slide in revenue, resulting in HK$8.568 billion (US$1 billion). Concurrently, the profit attributable faced a steep 29.6% fall, amounting to HK$232.7 million.

    Challenging Industry Landscape

    The management acknowledged a severe downturn in the restaurant sector both in Hong Kong and Mainland China. The slump was aggravated by heightened economic fragility and a tepid consumer sentiment. Additional factors contributing to the downturn included the outbound spending habits of Hong Kong’s residents and stiff price competition in Mainland China’s marketplace.

    In Hong Kong, the revenue loss was marked at 1.4% with casual dining and quick service restaurants experiencing a decline of 6.4% and 0.3% respectively. Revenue from Mainland China recorded a 1.3% decrease.

    Strategic Adaptation

    Sunny Lo, the Chairman of Cafe de Coral, contended that the uncertainty over the course of the previous year was indicative of a long-term transformation in global markets. As per him, this transformation was triggered by geopolitical forces adapting to a new dynamic.

    Lo stated, “Our management team has accepted and embraced the current economic challenges and is adapting the business to thrive in the new environment.” He further emphasized the company’s commitment to the future by refining its restaurant portfolio, hiring new talent, and integrating innovative technological solutions to transform the business operations.

    Cafe de Coral currently oversees a network of over 500 stores spanning Hong Kong, Macau, and nine principal cities in Mainland China.

    Questions & Answers

    What is the main reason for Cafe de Coral’s decreased profits and sales in the last fiscal year?
    The primary reasons for the decrease in profit and sales were attributed to a weak economy and lukewarm consumer sentiment, particularly in Hong Kong and Mainland China.

    How did the downturn affect different restaurant types?
    The downturn affected casual dining and quick service restaurants differently. Casual dining saw a decrease of 6.4%, while quick service restaurants experienced a smaller decrease of 0.3%.

    What steps is Cafe de Coral taking to adapt to the current economic challenges?
    The company is adapting by refining its restaurant portfolio, recruiting fresh talent, and incorporating new technology into its operations.

  • Cafe de Coral warns of declining profit

    Cafe de Coral warns of declining profit

    Cafe de Coral expects to report lower net profit for the six months ended September 30 due to a “severe and expected downturn” amid a weakened economy.

    The restaurant chain forecasts net profit to decline not higher by 30 per cent from HK$200.6 million (US$25.8 million) in the year-ago period, due to the plunge in the restaurant business and a high-base effect following strong sales recovery when the pandemic-related restrictions were lifted.

    In Hong Kong, the company focused on value offers, menu mix, hero product promotions, and membership loyalty strategies to create demand and help offset decline.

    In Mainland China, the company implemented quick menu investments, promotional offers, and brand campaigns to keep a stable performance and profit margins.

    “With the central government’s determined efforts to promote recovery of the economy, as well as our strong underlying business fundamentals and steady focus on constant internal improvement, the group is well positioned to return to growth as the market recovers,” said the company.

  • Cafe de Coral ramps up Mainland China expansion plans

    Cafe de Coral ramps up Mainland China expansion plans

    Hong Kong-listed Cafe de Coral Holdings, one of Asia’s largest restaurant and catering groups operating quick-service restaurants, will speed up its expansion in mainland China with 17 store openings in the pipeline.

    The company revealed its plans after its net profit for 2020 almost quintupled, despite lower revenue in Hong Kong, thanks to pandemic relief and subsidies by the Chinese and Hong Kong governments, and other actions it undertook to save on costs.

    “Our business in mainland China has recovered after the initial severe lockdown. The group will continue to expand its network in the Greater Bay Area,” Sunny Lo Hoi-kwong, chairman of the company, said in a filing with the Hong Kong stock exchange on Tuesday.

    Cafe de Coral was able to take advantage of China’s fast recovery from the economic dislocation caused by the coronavirus pandemic. China’s economy was already growing at 2.3 percent even while Hong Kong’s economy was registering a 6.1 percent contraction in 2020.

    The company “took advantage of the situation to increase the pace of network expansion, opening 13 new stores during the year with a strategic focus on Guangzhou and Shenzhen – and currently has 17 stores in the pipeline to open next year”, he said. As of 31 March 2021, the company had 352 stores in Hong Kong and another 121 in mainland China.

    “As the mainland China market was able to quickly control the severity of the Covid-19 pandemic, domestic consumption is expected to rebound at a faster rate,” Lo said.

    The company’s net profit skyrocketed 3.88 times to HK$359.1 million (US$46.3 million) for the year ended 31 March 2021, from HK$73.6 million in the previous year, according to the filing. In contrast, its revenue fell 15.7 percent to HK$6.7 billion.

    Cafe de Coral received pandemic relief and subsidies from governments in the city and the mainland totaling HK$638.9 million, including HK$486.8 million under the Employment Support Scheme in Hong Kong.

    It also adapted product offerings and operations to a “new normal”, implemented stringent cost controls, manpower deployment, and acceleration of technology upgrades to capture more takeaway and delivery business. These measures, combined with relaxed social distancing restrictions, led to improved revenue in the second half of the financial year.

    Its net profit, however, still does not match pre-pandemic levels of up to HK$569.9 million for the year ended 31 March 2019, before the onset of protests and the coronavirus pandemic. Restrictions prompted by the pandemic barred dinner service for 114 days in the financial year, in addition to the nine days that it voluntarily suspended operations.

    “As the pandemic situation resolves, the group expects business performance to make progress along with the economy,” Lo said. “The industry has faced a severe shock and many weaker players have already exited the market. Those that remain are lean, fit, and aggressive. And we anticipate a sharply competitive environment in the year ahead.”

    A final dividend of 28 HK cents per share was recommended on Tuesday, compared with nil in the previous financial year.

    Lees ook:

    Lees ook:

  • Cafe de Coral Group appoints new managing director

    Cafe de Coral Group appoints new managing director

    Café de Coral has promoted Piony Leung to managing director (Hong Kong) with immediate effect.  In her new position, Leung reports to group CEO Peter Lo and manages business operations and provides strategic leadership across Café de Coral Group’s business in the city, including quick-service restaurants, casual dining, and institutional catering. She will also play a pivotal role in meeting the company’s growth goals in the Hong Kong F&B sector.

    Piony was previously managing director (quick-service restaurants) of Café de Coral Group, and boasts more than 25 years of experience in the retail and fast-moving consumer goods industries. Under her leadership in 2020, the group’s quick-service restaurants business took a number of actions to address weak market conditions, shifted marketing focus to promote take-away and delivery services, redesigned menus to meet changing demand, and introduced an e-commerce platform for selling popular seasonal products such as poon choi and party sets.

    “In the face of unprecedented challenges, I am deeply impressed by our frontline staff who have gone above and beyond to service our customers while doing their best to meet our business goals. Although the economic outlook remains uncertain, I am committed to working side by side with my team members to explore future business opportunities and retain the Group’s leadership position in this rapidly changing market,” she commented.

    Speaking of Leung’s appointment, Lo said her leadership skills had led the team through major market shocks and adapted to the challenging business landscape.

    “In the post-pandemic era, it is essential that the group is able to capture opportunities bought by the fast-changing market and consumer behaviours. I have every confidence that she will be able to maximize business synergies and build a stronger brand portfolio by integrating the quick service restaurants, casual dining and institutional catering business as a whole, offering a wide range of food options that cater to the diverse tastes of the greater community,” Lo explained.

    Lees ook:

    Lees ook:

    Lees ook:

    Lees ook:

  • Online move limits damage to Cafe de Coral Group’s sales

    Online move limits damage to Cafe de Coral Group’s sales

    Listed Hong Kong restaurant and catering operator Cafe de Coral Group managed to minimize the impact on sales during Covid-19 social-distancing restrictions by expanding its online and delivery operations.

    The company operates the Cafe de Coral fast food and Super Super Congee & Noodles QSR chains, along with the casual-dining restaurant’s Shanghai Lao Lao, Mixian Sense (pictured above),The Spaghetti House and Oliver’s Super Sandwiches.

    Sales for the year to March 31 decreased by a modest 6.2 percent to US$1.03 billion, with the Hong Kong casual-dining business taking the biggest hit, down 14 per cent. Overall Hong Kong sales fell by 6.4 percent and Mainland China sales by 6.2 percent.

    Profit attributable to shareholders for the year plunged 87.1 percent $9.5 million.

    Chairman Sunny Lo Hoi Kwong says the coronavirus outbreak will force a re-shuffle of the way businesses to operate as they adapt to the new market landscape.

    “Once the pandemic is under control, I believe Hong Kong – and the world as a whole – will need to adapt to a new business paradigm.”

    Cafe de Coral Group addressed some of the decline in dine-in sales by measures such as introducing self-service ordering kiosks in stores and increasing its emphasis on online ordering and home-delivery services.

    “At the same time, we are making internal adjustments to our operations by fine-tuning dishes and updating menus to optimize meals for delivery. Anticipating a shift from in-restaurant dining to a broader mix of in-store and delivery options, our focus on technology, efficiency and cost-effectiveness will only intensify going forward,” he said. The company also partnered with home-delivery apps.

    Cafe de Coral Group has also been reviewing lease agreements with landlords to reduce overheads. “With the group’s strong, 50-year reputation and our position as one of Hong Kong’s leading listed catering groups, landlords have been quite willing to work with us,” he said.

    Lees ook:

    Lees ook:

  • Cafe de Coral warns of 90-per-cent profit plunge

    Cafe de Coral warns of 90-per-cent profit plunge

    Cafe de Coral group expects its full-year profit to plunge by up to 90 percent for the March year as the Covid-19 crisis and last year’s protests dented customer traffic.

    In a profit warning to shareholders, chairman Sunny Lo said that during the fourth quarter, the group entered into the deficit when the outbreak of Covid-19 occurred.

    “Business operations and consumer spending in the group’s key operating territories have been severely impacted by the outbreak of Covid-19 since January,” he said in a stock-exchange filing. “The group’s business performance, which had already been impacted by poor market conditions and weak consumer sentiment during the first half of the year, was even more significantly impacted during the fourth quarter when our business and operations were further affected by Covid-19.”

    Besides its namesake brand, Cafe de Coral Holdings operates chains including The Spaghetti House, Oliver’s Super Sandwiches, Super Super Congee & Noodles, Shanghai Lao Lao and Mixian Sense.

    During the six months to September 30, Cafe de Coral group recorded a decline in profit of 34.5 percent. Full-year results are expected to be released in mid-June.

    Lo said the group has been closely monitoring market conditions and has adjusted its business strategies and operations to minimize losses. In an attempt to increase sales, the Cafe de Coral group has introduced simplified menus featuring low price meals and extensive promotions.

    “Adapting to social-distancing trends, marketing focus on takeaway and home delivery have increased,” said Lo.

    “The group has also implemented proactive cost control measures on rent, labor and food – and is stringently managing working capital to ensure healthy cash flow and a strong cash position to weather the currently difficult operating environment.”

    Lees ook:

  • Cafe de Coral sacrifices margin for profit in tough half year

    Cafe de Coral sacrifices margin for profit in tough half year

    Cafe de Coral Group sacrificed margin to maintain sales in the first half of this year, resulting in a 34.5-per-cent decline in profit attributable to shareholders.

    Group sales remained relatively stable in the six months to September, up 1.6 percent to HK$4.264 billion with profit down from $228.7 million to $149.7 million.

    Chairman Sunny Lo Hoi Kwong said weak consumer sentiment impacted the company’s quick-service restaurant network and casual-dining business in Hong Kong, resulting in declining sales.

    “In order to maintain sales and protect market share, the group launched more value meals and promotions, which affected margins in the short term. On the other hand, operating costs including labor and rent have been rising, resulting in a decline in profit during the period under review,” he said.

    The Cafe de Coral chain itself reported flat growth for the half-year. After consolidation of stores last year, the company opened seven new ones in the first half, ending the period with 165 – three more than at the end of March.

    More new stores are planned for the rest of the financial year, mainly in community areas with high potential and better returns, and the brand will launch on Foodpanda and mobile apps in the current quarter.

    The Super Super Congee & Noodles chain opened three new stores taking its network to 48, but same-store sales fell by 1 percent year on year.

    The company’s Chinese-cuisine brands, Shanghai Lao Lao and Mixian Sense, ended the period with 13 and 20 shops respectively (up from 12 and 17 in March). Kwong said the brands are expected to deliver a more solid contribution to the group’s casual dining portfolio in the future.

    Non-Chinese brands The Spaghetti House and Oliver’s Super Sandwiches, now have eight and 14 shops respectively (up from seven and 13 in March) and despite the periodic closure of some key shops during the half, The Spaghetti House’s repositioning as a family restaurant and its 40th-anniversary promotions generated a positive market response.

    Meanwhile, revenue from Mainland China increased by 3.6 percent to $611.9 million, despite a 4.5-per-cent decrease in the value of the Renminbi against the Hong Kong dollar.

    “Our Southern China fast-food business carried the strong momentum of the previous financial year into the first half of FY2019/20, achieving a 9.6-per-cent increase in revenue to RMB516 million, with same-store sales growth of 6 percent as existing outlets maintained healthy growth and new shops performed well,” said Lo.

    Five new shops opened in strategic city locations including Guangzhou, Shenzhen, and Zhuhai – taking the network to 107 as at September 30 – a net increase of 10 stores since March.

    An additional 16 shops are planned to open during the second half of the fiscal year and the group has established strategic alliances with eight real-estate developers operating in the Greater Bay Area to jointly collaborate on network expansion.

  • Cafe de Coral profits down during 50th anniversary year

    Cafe de Coral profits down during 50th anniversary year

    A sharp focus on customer experience and behind-the-scenes efficiency has driven a solid rise in profits for Cafe de Coral in its 50th year of trading.

    Revenue for the Hong Kong-listed quick-service restaurant, catering and casual dining operator rose by a modest 0.8 per cent to HK$8.494 billion, however profit attributable to shareholders soared 28.9 per cent to $590.3 million, primarily due to improvements in operating efficiency and profit margins.

    “The results achieved during the year under review indicate clear improvement in performance and customer experience, as well as a positive trend in all areas of operations,” said chairman  Sunny Lo Hoi Kwong.

    “Our philosophy towards development is driven by a long-term view, and is inspired by a belief that development cannot be rushed, yet it cannot be slow. While a succession team and sustainable growth take time to nurture, it is important the business maintains forward momentum while adapting to the environment.”

    He said the China market – and in particular the Greater Bay Area – was a key driver of growth for the group during the past year.

    “Over the past 50 years, our business has organically grown outward from Hong Kong to include key neighbouring cities and regions, which cover largely the same footprint as the official Greater Bay Area region. In expanding from our home market, Cafe de Coral’s network in Mainland China has naturally focused on the Greater Bay Area – building on our knowledge of customers, markets, property and supply chain logistics. This has allowed us to grow at a comfortable pace, confident in our ability to maintain our high standards of quality, cleanliness and service throughout our network.”

    He said focusing on the future business environment, technology will continue to be a key differentiator of the business this year. “Whether automating mobile ordering, payment or take-out and delivery, e-channels now represent a significant portion of our business, which will only grow as time passes.”

    While sales in the QSR and institutional division decreased by 0.6 per cent to $6.26 billion, the businesses maintained their leadership positions in the Hong Kong market, and contributed 73.8 per cent of the group’s total sales. The division finished the year with 298 outlets – the same as at the same time a year earlier.

    “Although the Hong Kong market remains very competitive, sentiment is positive and the fast food segment continues to grow,” said Lo. “In order to maximise growth opportunities, the group is maintaining its focus on improving all parts of the customer journey. With the manpower investment program in previous years now largely complete, costs are stable and under control – and margins are improving as a result.”

    He said consumers remained price sensitive and continued to be attracted by price cuts and value promotions. Cafe de Coral fast-food recorded flat same-store sales growth during the year. A review of the store network saw one opened and six closed during the year, for a net 162 shops as at March 31.

    “With network consolidation now complete, the group expects to expand its network. Seven new outlets have been scheduled to open in the months ahead.”

    A new customer loyalty program launched in May last year has proven highly popular with customers, with a significant increase in membership.

    The group has strengthened Super Super Congee & Noodles’ brand positioning as Hong Kong’s No 1 leading neighbourhood chain, providing nostalgic traditional and authentic Chinese cuisine (congee, noodles and wok-fried dishes). It achieved 2 per cent same-store sales growth during the year.

    The casual dining business achieved revenue of $905.8 million during the year, an increase of 2.7 per cent year on year. Following rationalisation of the brand portfolio and branch network, the division operated 60 shops at the end of the year, eight fewer than a year earlier.

    The group’s Chinese cuisine brands, Shanghai Lao Lao and Mixian Sense, maintained sizeable networks and shop presence with 12 and 17 shops at year end, respectively. Shanghai Lao Lao, the company’s leading home-grown brand, was successful in its promotions during the year.

    Mixian Sense opened three more shops during the year, introduced QR code ordering to improve the customer experience and operational efficiency, and also launched a new VIP program to encourage customer response.

    Non-Chinese cuisine brands continued to rationalise their branch networks to improve performance. The Spaghetti House ended the year with seven shops and Oliver’s Super Sandwiches with 13, both chains two stores down year on year.

    Lo said Mainland China represents a major opportunity for the group’s business. “Continuing last year’s momentum, the Mainland China business delivered strong performance during the year, achieving 7 per cent growth in revenue to $1.152 billion and same-store sales growth of 2 per cent.”

    Building on management’s confidence in the market, the group doubled the number of store openings compared to the previous year, opening 16 shops to end with 107. Another 20 new stores are planned for this year.

    Lees ook:

  • “Shine Bright” Like Cafe de Coral

    “Shine Bright” Like Cafe de Coral

    With expansion in Hong Kong and “outstanding” growth in China, restaurant/catering group Cafe de Coral Holdings says it has had six months of key achievements.

    Its first-half revenue grew by 6.2 per cent to HK$4.1 billion (US$525 million), but profits were hit as rising staff costs exceeded the group’s pace of revenue growth. The profit attributable to shareholders, $205.7 million, was down 11.3 per cent on last year’s first half, while gross profit margin fell to 11.9 per cent from 13.3 per cent.

    This decline, in Hong Kong, was largely because of the group’s investment in people for its core quick-service restaurant (QSR) business. “This was necessary for attracting and retaining talent in a highly competitive labour market,” says Cafe de Coral, which continued its network expansion by opening more outlets than in previous years.

    However, the drop was partially offset by business growth in Mainland China. “Following our previous efforts to consolidate our branch network there, our product and promotion strategies began to pay off with strong growth in same-store sales and profit.”

    QSR and institutional catering brands continued to dominate in Hong Kong, contributing to 74.6 per cent of the group’s total revenue for the period. Revenue from this division rose 5.7 per cent to $3 billion.

    At September 30, the group’s QSR and institutional catering business had 306 units, up from 295 at the end of March.

    Positive market

    The market for fast-food service in Hong Kong was positive, with customers still price sensitive and value-driven. Cafe de Coral fast food achieved same-store sales growth of 3 per cent, and 10 branches were opened for the group to finish the period with 170 outlets.

    Its other QSR brand Super Super Congee and Noodles had 51 stores at the end of September, with two new outlets since March 31. Same-store sales growth was maintained at 1 per cent.

    Overall, the performance for institutional catering was steady, with both Asia Pacific Catering and Luncheon Star gaining new contracts. The total number of business units at the end of the review period was 85, up from 79 six months earlier.

    After brand renovations and consolidation, casual-dining revenue grew 9.2 per cent to reach $422 million, and the first half ended with 72 shops, up from 64 at the end of March. Underperforming outlets of The Spaghetti House were closed, while Oliver’s Super Sandwiches had a rebranding program. The two restaurant chains had 10 and 18 shops respectively at the end of September, compared with 12 and 19 six months earlier.

    Cafe de Coral’s homegrown brands established a stronger foothold through expansion. Three Shanghai Lao Lao outlets were added during the half-year, as well as six Mixian Sense restaurants.

    China strategy

    After a period of store consolidation, the company’s focus for the mainland was on developing a local management team and menus catering to local tastes. This strategy began to pay off with same-store sales growth of 15 per cent and “substantial profit growth” in southern China.

    During the six months, the China division saw revenue rise 7.3 per cent to $548.3 million, while the total number of restaurants was consolidated at 96, down three from March 31. O2O delivery services were also launched, which the group says have been growing faster than the in-store market.

    Late last month, the group closed its final two stores in eastern China as part of a short-term strategic adjustment while it focuses on developing the southern China market where the potential for growth is higher.

    Meanwhile, the group set up six shops at the refurbished JP Plaza in Causeway Bay to demonstrate the synergy it can achieve across all its fast-food and casual-dining brands. These were set up in one 16,000sqft (1490sqm) complex, anchored by Cafe de Coral and including Mixian Sense, Shanghai Lao Lao and The Spaghetti House.

    At the end of September, the Cafe de Coral network had 474 stores in Hong Kong and China, up from 45 six months earlier.

    Lees ook:

  • Cafe de Coral China closing east China stores

    Cafe de Coral China closing east China stores

    Cafe de Coral China is closing its stores in the nation’s east to focus on the southern China market.

    With 359 restaurants in Hong Kong and 99 on the mainland, the Hong Kong fast-food chain announced on its official WeChat account that it is closing its restaurants in Nanjing, Shanghai and Wuxi this month. It advised customers to cancel their membership and obtain a refund.

    A spokesperson says the closures are temporary and a “short-term strategic adjustment” to put a focus on business in the south. “We are performing well in the southern China market, and generally in Mainland China we are achieving positive growth,” she says.

    In its annual report in March, the company said competition was likely to remain keen in Mainland China, but it was optimistic about the prospects in the country because of its “long history and strong foundation”. Mainland same-store sales growth had been satisfactory and profit margin had improved.

    The report said the company would build its brand presence in strategic locations in Southern China, increase brand penetration in second- and third-tier cities, enhance brand loyalty and win over new customers.

    Highly competitive

    Cafe de Coral works in a highly competitive segment, says OC&C Strategy Consultants partner Pascal Martin. “You can find similar dishes in street shops at very low prices in China. This is different from western fast-food chains which do not have to compete so much with low-priced local equivalents.”

    He suggests the chain might need to adjust its flavours to accommodate tastes for various regions in China, which all have different preferences.

    Martin also says the Cafe de Coral model also requires expensive space, and consumer habits are changing with the growth of online ordering and take-out. “Maybe the chain’s new strategy will take this into account more fully.”

    Another issue he raises is that the brand may not have much power in China yet. “Insufficient investment in marketing – particularly online marketing in China – and lack of brand recognition may not have achieved the level of traffic needed to run the restaurants successfully.”

    OC&C research last year into the foodservice landscape in China noted that consumers eat out almost three times a week on average, and are becoming more sophisticated amid increased awareness and openness toward international brands. Its report found that Chinese consumers actively seek out new restaurants and are receptive to new formats and concepts.

    “Moreover, food quality, a wide choice of categories and service quality came up as the three critical factors, while serving speed, convenience and pricing were rated less important.”

    Lees ook:

  • Revenue grows for Fairwood Holdings

    Revenue grows for Fairwood Holdings

    Revenue grew 6.8 per cent for fast-food company Fairwood Holdings in its six months to the end of September.

    Fairwood’s positive result coincides with a strong performance from rival corporate restaurateur Cafe de Coral reported earlier this week.

    Fairwood’s interim results show revenue reaching HK$1.257 billion (US$162 million) compared with HK$1.176 billion for the corresponding period last year. Profit attributable to equity shareholders increased by 1.8 per cent to HK$103.8 million.

    Executive chairman Dennis Lo says the company has focussed on “elevating every aspect of the customer experience” while maintaining a happy culture for its staff members.

    “All of these have been the key in fuelling our satisfactory organic growth and driving the dynamism of our brand.”

    He says the Hong Kong restaurant business performed exceptionally, with revenue growing by 8.7 per cent. In response to customer support, the group opened seven more stores in Hong Kong during the review period.

    The group has also enhanced its signature products, launched new and seasonal dishes, and offered table service for dinner in all stores. “The service has set a new standard for the fast-food industry, and has been very well-received by the public,” says Lo.
    There are also plans to expand its specialty restaurant segment, including a second branch of its new Japanese-Western restaurant ASAP.

    Automation expanded

    To manage costs and improve efficiency the group has engaged in global sourcing, menu and production planning, and flexible work scheduling. It has also expanded the automation of its central food-processing plant.

    Despite a challenging business environment, profitability was maintained in China, with a store opening in Guangzhou during the first half. Expansion will be focussed on the residential districts of Guangzhou and Shenzhen.

    “Connecting to senior citizens has always been an integral part of our corporate culture,” says Lo. “To show our appreciation toward senior citizens for their past contribution to society, we have issued more than 50,000 discount cards since 2014 as part of our Care for Seniors program, together with many other initiatives.”

    To address the needs of senior citizens as well as the physically challenged, Fairwood has created stores that address their needs by offering priority seating, stick hooks, handrails in toilets and non-glare menu boards.

    “Aside from treating customers well, Fairwood believes it is equally important to foster a happy work environment,” says Lo. The group has established focus groups to collect staff members’ opinions and feedback, and offered customer-centric training programs, advancement opportunities and team-building activities. “Such efforts have contributed toward achieving higher staff retention across all levels.”

    At the end of September, the group had 128 stores in Hong Kong, including 121 fast-food outlets and seven specialty restaurants, plus 10 stores in China.

    Lees ook:

  • Cafe de Coral grows revenue, profit, outlets

    Cafe de Coral grows revenue, profit, outlets

    Total revenue for the half-year to the end of September rose by 4.3 per cent to HK$3.89 billion (US$501.5 million) for restaurant and catering group Cafe de Coral Holdings.

    Net profit, at HK$232 million, was up 11.8 per cent, while profit attributable to shareholders rose similarly to HK$3.89 billion, according to its interim results.

    With stronger momentum in the fast-casual and casual-dining sector, the group says its quick-service restaurant (QSR) and institutional catering business continued to achieve encouraging results and steer further expansion.
    “Mainland China business persistently improves its profit margin with a lower break-even point, which has laid a solid platform for expansion,” says the group. “The positive results demonstrate not only the capable stewardship of our new management team, but also the successful completion of the group’s succession plan.”

    “Encouraging” revenue and same-store sales growth resulted in a robust and stable performance for the group’s (QSR) and institutional catering business.

    In China, revenue stabilised for its fast-food business, thanks to updated menus.

    Overall, the group’s QSR and institutional catering business in Hong Kong reported solid revenue gains, up 7.7 per cent. Same-store sales under the Cafe de Coral fast-food and Super Super Congee & Noodles grew 5 and 4 per cent respectively. As of September 30 the group had 288 QSR and institutional catering outlets, including 160 Cafe de Corals, 47 Super Super Congee & Noodles shops and 79 Asia Pacific Catering outlets.

    Strategic tenancies

    To speed up its expansion of the Cafe de Coral network, the group took advantage of the softer leasing market to take up tenancies at strategic and prime locations. Four outlets were added, with 11 more set to open. Seven more Super Super Congee & Noodles shops were added, with eight openings scheduled.

    Asia Pacific Catering renewed all major contracts while Luncheon Star continues to be the leading provider for schools.

    For its fast-casual and casual-dining sectors, the group saw 14.4 per cent revenue growth. Its catering-inspired Shanghai Lao Lao brand has evolved into a popular chain with eight outlets, says the group. Two of the outlets opened during the six months, with four more scheduled.

    Encouraged, the group says it will aim to scale up Mixian Sense to provide another lucrative revenue stream.

    Meanwhile, it is rejuvenating its Western-style brands, The Spaghetti House and Oliver’s Super Sandwiches. Decors and menus are being revamped.

    Launched last year, its Japanese and Korean-style franchise restaurants are still in the investment stage.

    Non-performing outlets in eastern and southern China have been closed, plus the management team has been localised as well as menus being revamped.

    Same-store sales from the fast-food business grew by 1.2 per cent with “remarkable profit improvement” on the mainland even after excluding the effect of new VAT rules and despite the segment revenue falling by 16.3 per cent. This was mainly a result of the strategic closure of non-performing stores.

    “While the imminent outlook is less than promising, the group remains confident its businesses will continue to fare reasonably well. Fortunately, our core QSR and institutional-catering segments, in particular, are relatively resilient to downturns.”

    Lees ook:

    Lees ook:

  • Cafe de Coral Group plans 20 new restaurants

    Cafe de Coral Group plans 20 new restaurants

    Quick Service Restaurant giant Cafe de Coral Group says it plans to open at least 20 new outlets in Hong Kong in the current financial year as it seeks to revive profit growth.

    The company this week revealed a three per cent increase in sales to HK$3.73 billion in the first half of the year, but a 14.7 per cent decline in profit to $207 million.

    “Seizing the opportunity of a softer leasing market, our Cafe de Coral and Super Super Congee & Noodles chains will be more proactive in further expanding its network,” the company said in its stock exchange filing.

    “Our team has been working on building greater network for our QSR platform with opening more than 20 shops in FY2015/16. We will also steer our current and new QSR concepts to

    further drive a bigger market share in this segment. Lifestyle cafe kiosk Just About Food and new innovative take-away concepts in key commercial hubs are tailored to target the needs of busy working crowds. These new QSR concepts have also led us to higher efficiency in the backdrop of high rental cost and persistent labour shortage.”

    Cafe de Coral Group’s QSR business in Hong Kong recorded a healthy turnover growth during the first half.

    “Performance of our fast casual and casual dining business was, however, held back by the significant investment we ploughed in to support our continual expansion in this segment. The group’s overall performance for the period has, to some extent, reflected a downturn in retail sentiments, driven by the weakening economy. Some of the group’s restaurants in the major shopping precincts saw a slow recovery in the aftermath of the community disruptions since the last quarter of 2014.”

    Despite the prevailing challenges, the group’s Hong Kong operations recorded turnover growth of four per cent to $3.12 billion. The Café de Coral chain saw its sales from comparable stores increase four per cent from the same period last year. The Super Super Congee & Noodles chain’s sales grew three per cent.

    In the fast casual and casual dining sector, Oliver’s Super Sandwiches continued to generate positive comparable store sales growth.

    “The Spaghetti House and Spaghetti 360˚, despite being affected by the temporarily weakened customer spending during the period, seized the opportunity to rejuvenate and strengthen our presence in the Italian dining sub-sector with The Spaghetti House re-launching its flagship store in Cityplaza, Hong Kong.

    “Shanghai Lao Lao and Mixian Sense, our home-grown brands that underscore the group’s diversification strategy, reported an encouraging performance. During the period of review, both chains continued their trajectories of steady growth and reinforced our solid leap into the Chinese dining sub-sector.

    Leveraging on the franchising model in our Japanese and Korean dining sub-sector, The Cup and Don Don Tei restaurants have opened in Hong Kong.

    Mainland China ‘flat’

    In Mainland China, Cafe de Coral’s fast food business growth was flat compared with last year and its casual dining business saw a steeper decline, “due to the rising tide of consumer reluctance to spend on higher priced meals”.

    “We made the deliberate move to slow down our growth in scale and pace in the country.

    “A balanced business portfolio with the right mix of our QSR, fast casual and casual dining and Mainland platforms will provide us with a greater room for expansion – a cornerstone of sustainable growth for the Cafe de Coral Group,” the company said.

    “Business in Mainland China has remained stagnant and consumption patterns are changing. Aware of the market deteriorations, the group has carefully gauged local consumption behavior, with a prudent approach towards operating its business there, primarily the Cafe de Coral and The Spaghetti House chains. We have deliberately adjusted our expansion pace and consolidated our operations, closing underperforming stores as well as strengthening our infrastructures, systems and teams in pursuit of a viable, future-oriented growth strategy.”

    Lees ook:

  • Cafe de Coral thrives

    Cafe de Coral thrives

    Listed QSR operator Cafe de Coral has reported an eight per cent rise in similar retailer gross sales and a robust efficiency in Hong Kong, regardless of difficult mainland China market.

    The corporate launched its 2015 yr financials as we speak (June 23) reporting a 7.eight per cent improve in turnover to HK$7.356 billion and a modest one per cent improve in revenue attributable to shareholders to $587 million.

    The Hong Kong QSR and institutional catering operations, led by its namesake Cafe de Coral restaurant chain and western idea Spaghetti Home, outperformed the broader market, gross sales growing by 10 per cent to $5.26 billion within the yr to March 31. Hong Kong accounts for 83 per cent of the corporate’s turnover.

    CEO Hoi Lo stated the corporate achieved a “strategic leap within the quick informal phase”.

    “Through the yr, we expanded the group’s quick informal portfolio. We scaled up our home-grown ideas Shanghai Lao Lao and Mixian Sense and signed on well-liked Korean and Japanese manufacturers, all of which introduced new impetus and fuelled the expansion of the quick informal phase in our enterprise.”

    It additionally streamlined its operations, divesting Manchu Wok, SenseAsian and Wasabi Grill and Noodle companies in North America; and its 50 per cent share within the Hong Kong enterprise of Taiwanese-founded 85˚C bakery enterprise. Regardless of the model cull, the corporate retained almost 17,500 employees as on the finish of March.

    Café de Coral and Tremendous Tremendous Congee & Noodles are among the many main QSR manufacturers in Hong Kong with sizeable market shares. The corporate operated 156 Café de Coral quick meals retailers and 35 Tremendous Tremendous Congee & Noodles outlets as of the top of March.

    Now thought-about family names, these manufacturers have gained the belief and help of our clients in Hong Kong, stated Lo.

    Now Cafe de Coral Holdings is increasing its portfolio of manufacturers to additional construct its share of the larger QSR market.

    New manufacturers, Simply About Meals and C. Categorical will proceed to be expanded, together with full-service chains Shanghai Lao Lao and Mixian Sense, each concentrating on a youthful demographic.

    “We proceed to rejuvenate the Oliver’s Tremendous Sandwiches model and idea to make sure it stays related to our numerous buyer teams,” stated Lo.

    “Our collaboration with well-known Japanese and Korean companions has additionally enabled us to complement our quick informal portfolio. The current opening of The Cup, a Korean way of life quick informal chain, in Hong Kong in addition to the forthcoming Japanese donburi and pasta chains will additional increase the group’s presence within the quick informal sector.

    Cafe de Coral sees its main progress engine within the years forward to be the mainland China market which Lo describes as “extremely dynamic and aggressive.

    “Gamers from everywhere in the world are eyeing on this profitable market. That being stated, the speedy change of enterprise surroundings and shopper habits on this fast-growing business is a continuing problem for enterprise operators within the nation. The Café de Coral Group has a long-standing presence within the Mainland and has gained a superb understanding of the nation’s enterprise surroundings and shopper choice. This has helped us formulate the efficient enterprise methods for the group in capturing alternatives and unleashing our potential within the nation.

    “Setting the fitting geographical technique is an important theme in our long-term progress plans for the Mainland. By benefiting from our similarities in tradition and language in addition to our shut proximity to Guangdong, the group is properly positioned to department out within the cities of this province. Its huge inhabitants and financial maturity present the Café de Coral Group with ample alternatives for enterprise enlargement, and we’re dedicated to rising our main chains and to capturing a bigger share of this market with new ideas and thrilling manufacturers,” he stated.

    Progress in Mainland China’s catering business continued to decelerate through the yr, partly

    as a result of decrease spending on business-related eating and receptions.

    “This affected not solely high-end eating places but in addition different segments within the nation’s weakening eating business. In face of the enterprise setting and market development, we had adjusted our shop-opening technique and tempo in the course of the yr,” stated Lo.

    “Nevertheless, working prices for our Mainland China enterprise, particularly these for rental and labour, have been rising considerably over the previous years. These mixed have affected the profitability of our enterprise operation within the Mainland.”

    Regardless of the constructive comparable gross sales progress of three per cent achieved by the corporate’s 100-outlet South China Café de Coral chain, the entire income degree of the enterprise operations in Mainland China was flat in contrast with the earlier monetary yr, largely because of the adjusted shop-opening tempo. The Spaghetti Home skilled a setback in its efficiency on account of declining shopper spending within the mid-priced eating sector.

    Wanting forward, Lo stated the macroeconomic surroundings in higher China stays a priority, owing to financial circumstances in Hong Kong and the uncertainties of the enterprise surroundings in Mainland China.

    “Excessive rental charges, rising uncooked materials prices and the persistent labour scarcity all stay challenges for our enterprise and operation. However, we’re assured that the strong basis supporting our enterprise and the strong infrastructure we now have constructed underneath the group’s sustainability initiatives up to now years will allow us to proceed our near-term enterprise improvement and 5 yr progress plans,” he stated.

    “Our regular and prudent shop-opening program for each our main manufacturers and our youthful ideas will proceed. With the brand new ventures we’ve got taken on, we’ll seize probably the most opportune time to increase in our key markets.”