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Tag: Sales

  • Estee Lauder’s quarterly sales miss on lower retail traffic

    Cosmetics maker Estee Lauder Cos. reported a smaller-than-expected rise in quarterly sales, hurt by a slowdown in sales in the Americas as fewer customers visited department stores and tourist spending declined.

    Shares of the company were down about 4 percent at $91.34 before the bell on Friday. Up to Thursday’s close, the stock had risen 13.5 percent in the past year.

    Sales in the Americas, its biggest market, rose 1.4 pct to $1.1 billion on a reported basis, its slowest growth in four quarters.

    Lower retail traffic mainly affected the company’s “heritage” brands Estee Lauder and Clinique, and a few M.A.C freestanding stores.

    Demand for its skin care products continued to weaken, as the company cited overall global slowdown in the category. Sales from its namesake brand and Clinique were also hurt by lower sales in some Asia-Pacific countries, mainly Hong Kong.

    “Social and political issues, currency volatility and economic challenges are affecting consumer behavior in certain countries, such as Hong Kong, France and some emerging markets,” the company said.

    Rival L’Oreal SA earlier reported second-quarter sales growth marginally below forecast as the company said Western Europe was being held back due to a “very difficult market in France.”

    Net income attributable to the company fell to $93.5 million, or 25 cents per share, in the quarter, from $153 million, or 40 cents per share, a year earlier.

    Net income was hurt by restructuring and other charges. Excluding items, the company earned 43 cents per share. Net sales rose to $2.65 billion from $2.52 billion. Analysts on average had expected a profit of 40 cents per share and revenue of $2.66 billion.

    New York City-based Estee Lauder said its expects fiscal 2017 adjusted profit to be between $3.38-$3.44 per share, missing analysts’ estimates of $3.53.

    The company also said it expects to incur restructuring charges of about $80 million-$100 million in fiscal 2017, related to its Leading Beauty Forward strategy.

    As part of its Leading Beauty Forward strategy, the company had earlier approved restructuring initiatives to exit businesses in certain markets and channels of distribution while also reducing its workforce globally.

     

  • VW’s Audi posts 2.3 percent rise in July sales

    VW’s Audi posts 2.3 percent rise in July sales

    Audi sold 2.3 percent more cars in July on growing demand for the redesigned top-selling A4 saloon, though kept trailing behind German luxury rivals BMW (BMWG.DE) and Mercedes-Benz (DAIGn.DE).

    Audi’s global sales increased to 149,400 cars and sport-utility vehicles from 146,073 a year earlier, the Ingolstadt-based carmaker said on Thursday, with its year-to-date deliveries up 5.2 percent to 1.10 million cars.

    Daimler’s Mercedes-Benz last week posted a 9.4 percent increase in sales to 163,770 cars, its best-ever July result, compared with a 4 percent gain at BMW’s core brand to 153,392.

    After seven months, Mercedes-Benz is on course to become the world’s biggest luxury carmaker by sales, replacing BMW which has kept the lead since 2005.

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  • BMW worldwide sales increases by 4 percent in July

    BMW worldwide sales increases by 4 percent in July

    German car manufacturer, BMW Group has announced its sales number for the month of July. The automaker in total sold 180,080 vehicles around the world with an increase of 4.0% when compared to same month last year. After a sluggish first half of the years, the automaker reported a solid start to the third quarter with year-to-date sales climbing 5.5% with 1,343,217 vehicles delivered worldwide.

    “The BMW Group continues to deliver sustainable, profitable sales growth month after month,” said Dr Ian Robertson, Member of the BMW AG Board of Management with responsibility for Sales and Marketing BMW. “While we see growth across our range, the fact that the planned production for our electrified 7 Series, 3 Series and 2 Series Active Tourer models is already sold out this year demonstrates our strategy of rolling out electrification on all models is the right one. We will, of course, now respond to this high customer demand,” he added.

    In a press statement, the company stated that BMW brand sold 153,392 units, an increase of 4.0% in the July. This brings year-to-date sales for the brand to 1,139,947 units, an increase of 5.6% compared with the first seven months of last year.

    On other hand, MINI achieved record sales of 26,439 units in July with a rise of 4.0%. A total of 201,337 MINIs were sold in the first seven months of the year, an increase of 5.2% and the first time the brand has sold over 200,000 vehicles by this point in the year. According to the company, the biggest growth drivers for Mini as a brand are the Convertible and the Clubman.

    In Europe, combined monthly sales of BMW and MINI totalled 79,815 in July, up 5.6% compared with the same month last year. Year-to-date sales in Europe are up 10.5% with a total of 622,664 vehicles delivered. Almost all markets in the region have contributed to this strong growth with the three biggest markets, Germany (182,390 / +7.8%), the UK (136,914 / +9.6%) and France (49,755/ +13.0%) playing a significant role.

    Sales of BMW and MINI vehicles in Asia also saw strong growth last month with a total of 56,819 vehicles delivered to customers in July (+7.9%). In the first seven months of the year, a total of 417,730 BMW and MINI vehicles were sold in Asia, an increase of 7.4% compared with the same period last year. The region’s biggest market, Mainland China, achieved an 8.5% increase compared with the first seven months of last year, with a total of 287,753 vehicles sold. Year-to-date sales in Japan (41,750 / +8.2%) and South Korea (34,569 / +9.9%) also show strong growth.

    Sales of BMW and MINI in the Americas decreased 3.9% in July compared with the same month last year, with a total of 38,097 vehicles delivered to customers in the region. Year-to-date sales of BMW and MINI vehicles in the region total 260,621, which is down 7.4% compared with the same period last year. While sales in Canada (25,524 / +7.3%) and Mexico (18,308 / +9.1%) are up, the increasingly competitive market in the USA has seen year-to-date deliveries decrease 9.5% with a total of 209,131 BMW and MINIs delivered to customers.

    This year continues to be the best ever for BMW Motorrad, with year-to-date sales up 2.1% compared with the same period last year: 94,546 motorcycles and maxi-scooters were delivered to customers in the first seven months of the year. Monthly sales for July achieved almost the same extremely high level as last year with 13,792 units sold, a slight decrease of 2.7%.

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  • Parkson Retail Asia cuts Q4 loss by 80%

    Parkson Retail Asia cuts Q4 loss by 80%

    South-east Asian department store operator Parkson Retail Asia narrowed its fourth quarter net loss by 80 per cent, owing to the absence of costs associated with a store closure a year earlier.

    Parkson, which does not have stores in Singapore, reported a net loss of $12 million for the three months to June 30.

    Revenue was up 10.9 per cent to $93.9 million from a year earlier, it added yesterday.

    The closure of a store at Landmark 72 in Hanoi, Vietnam in January last year had cost the firm $68.4 million. This went under other expenses – which include advertising, selling and administrative expenses, for instance – which improved 70.4 per cent to $27.6 million.

    Owing to this, the firm added in a statement that “as a percentage of revenue, the other expense ratios for the fourth quarter and the full year declined substantially year on year”.

    For the 12 months to June 30, Parkson reversed a net loss of $34.7 million to a net profit of $33 million, while revenue dipped 9.4 per cent to $388.4 million from a year earlier.

    Parkson has department stores in cities across Malaysia, Vietnam, Indonesia and Myanmar.

    Malaysia reported same store sales growth being up 21.5 per cent, thanks to “early festive buying arising from the shift in the Hari Raya calendar”. The growth also came from a low base a year earlier, where consumers bought less after the 6 per cent goods and services tax was introduced on April 1 last year.

    Even though consumer sentiment remains subdued in Malaysia, the firm said it has initiated new concepts such as introducing South Korean apparel, affordable private labels and shoe speciality stores to diversify earnings.

    Parkson added: “We have been consolidating our department store space by identifying non-performing stores with the view to closure upon tenancy expiry.”

    The Myanmar operations’ same store sales growth, however, took a 25 per cent hit in the fourth quarter.

    Parkson added that there are plans to close the store in FMI Centre in Yangon for re-development, and this upcoming closure has affected sales.

    “The landlord has not confirmed the timing for the re-development,” the firm added.

    Overall, it expects the first quarter of the next financial year to remain challenging.

    Quarterly loss per share stood at 1.78 cents, up from a loss of 8.82 cents in the same period last year. Net asset value per share was 24 cents as at June 30, up from 19 cents as at the same date last year.

    Parkson proposed a final dividend of 0.5 cent.

    Its shares closed 0.3 cent lower at 15.6 cents yesterday.

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  • Pokemon Go game changer in Malaysian retail scene?

    Pokemon Go game changer in Malaysian retail scene?

    The runaway success of augmented reality game Pokemon Go can be a potential game changer in the local retail scene.

    UOBKayHian said in a report that the game could also be seen as a revenue booster for retail real estate investment trusts (REITs) and modestly positive for food and beverage (F&B)/convenience store retailers and cellular companies.

    “Pokemon Go creates higher footfall in malls. Although turnover revenue accounts for less than 10% of retail REITs’ revenue, sustained higher footfall leads to better rental reversion.

    The research house said Sunway REIT has reportedly experienced a double-digit hike in average footfall at its malls.

    “Car count has increased by 10%. Similarly, Suria KLCC and Pavilion have also garnered attraction from Pokemon Go ‘hunters’.

    UOBKayHian said F&B retailers like Starbucks, OldTown and other F&B retail chains surveyed saw minimal impact with sales being consistent before and after Pokemon Go’s launch.

    “Nevertheless the higher footfall in the malls and shoplots could eventually translate into higher sales for the F&B retailers.”

    As for convenience stores, the research house said KK Supermart, which operates a chain of 223 convenience stores in shoplots, had reportedly seen a surge in footfall, with the sales of some store shooting up by up to 20%.

    “Approximately one-third of both 7-Eleven and Bison’s stores are located in the malls. The higher footfall in the malls may translate into higher sales for these convenience stores.

    “However, we note from these companies that at this juncture, impact on earnings is minimal.”

    UOBKayHian said it was “potentially marginally positive” on the telecommunications sector on higher data usage and pre-paid reloads.

    It pointed out that Pokemon Go had hastened the adoption of smart phones, currently accounting for around 30% of global mobile phones.

    “The game could hasten global conversion to smart phones, which benefits Malaysian electrical and electronics component suppliers like Inari. Among the potential beneficiaries, our top pick is Sunway REIT.”

    The research house noted that public response to Pokemon Go, which was released on Aug 6, has been overwhelming in Malaysia.

    Pokemon Go, which is by far the highest revenue grossing game in history, can provide at least a short-term lift to various Malaysian companies.

    “Although widely seen as a fad, this game’s shelf life could well exceed common expectations; 90% of players who downloaded the app continue to play after its launch,” according to a media report.

  • Yamada Denki profits from strategy change

    Yamada Denki profits from strategy change

    Japanese electronics retailer Yamada Denki saw its operating profit surged to 2.5 times the year-earlier level in its latest quarter.

    The company says this reflects a strategic pivot to highly profitable white goods from digital electronics, which are susceptible to price drops.

    Logging 6.4 billion yen (US$62.4 million) in operating profit for the April-June period, the company says air conditioners sold briskly, as did ultra-high-resolution 4K televisions ahead of the Olympic Games in Rio de Janeiro.

    However, sales for the quarter fell 2 per cent to 363.7 billion yen. Widespread clearance sales ahead of store closures last year account for part of the comparative drop.

    Yamada Denki’s gross margin widened 0.4 points to 28 per cent following the closure of about 60 unprofitable locations last year. It has also remodelled about 200 stores a year since 2014, allowing more space for home appliances such as refrigerators and washers at the expense of personal computers.

    Coming from a human resources background, the company’s new president appointed in April, Mitsumasa Kuwano, has spearheaded reforms to the company’s staffing strategy, such as putting more workers on the sales floor during busy periods.

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  • Apple and Samsung continued to lose smartphone market share in China during Q2

    Apple and Samsung continued to lose smartphone market share in China during Q2

    Smartphone shipments in China during the second quarter rose 14.9% on a year-over-year basis to 149 million units. Sequentially, shipments rose 2.7%. This growth is not coming from high-end manufacturers like Samsung and Apple. Instead, entry-level handsets and mid-range 4G models are capturing attention from subscribers to the nation’s three major carriers. China Mobile, China Unicom and China Telecom are each offering subsidies on these less expensive models.

    This has resulted in a build up of inventory in the country’s retail channels. During the first two quarters of the year, manufacturers shipped more phones than the number that consumers were buying. As a result, analysts expect an “inventory correction” during the fourth quarter. This should result in manufacturers slowing down shipments of smartphones to retail channels in order to keep inventories lean.

    Digitimes own research has Huawei listed as the top smartphone producer in China with a 14% market share from April through June. The 12.7% share earned by Oppo during the same time period was next, followed by Vivo and Xiaomi with 11.2% and 10.4% of the market, respectively. Apple was fifth with a single digit slice of the pie.

    In an earlier report, Apple was said to have claimed 10.8% of the Chinese smartphone market during the first quarter of this year. That was a decline from the 12% share Apple controlled in the first quarter of 2015. Now in single digit territory, the company is looking at India to provide future growth in iPhone shipments.

    source: Digitimes

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  • Circle K Hong Kong sales defy downturn

    Circle K Hong Kong sales defy downturn

    Circle K Hong Kong sales rose 4.7 per cent in the first half of this year, defying the retail downturn.

    Parent Convenience Retail Asia has reported an overall turnover boost of 3.4 per cent to HK$2.339 billion. Same-store sales grew 5.2 per cent year on year in the six months to June 30.

    Turnover in the company’s Saint Honore bakery business decreased slightly, by 0.5 per cent to $496 million, with low-single-digit growth in comparable store sales in Hong Kong.

    Convenience Retail Asia has 324 Circle K stores in Hong Kong, 118 in Macau, Zhuhai and Guangzhou; and 94 Saint Honore stores in Hong Kong and 50 in Macau, Shenzhen and Guangzhou.  In the first half of this year, it opened six new Circle K stores in Hong Kong and closed 10 for a net decrease of four, and it opened seven new Saint Honore stores in Hong Kong and closed two for a net increase of five.

    The group’s net profit increased 68.4 per cent to HK$52 million for the six months, primarily due to the disposal of Circle K business in Guangzhou last year..

    “Despite weak retail market sentiment, convenience store and bakery operations achieved

    satisfactory comparable store sales growth in Hong Kong,” the company said in a stock exchange filing. “Core operating profit increased 7% on back of stabilised operating costs and improvement in Saint Honore operations.”

    With the stabilisation of the commercial property rental market, store expansion has become a key growth strategy for the Saint Honore chain.

    Convenience Retail Asia says during the second half of 2016, it will seek to grow profit at existing stores “by continuing to improve efficiency, reduce costs, and drive sales through innovative product development, marketing and category management”.

    “With the commercial rental market on the downswing, cautious store expansion will play a role in driving revenue across the convenience store and bakery businesses.

    “Although the business environment has been challenging, the group’s core operations remain

    strong and healthy, and it has a solid balance sheet with a good cash position. We will continue to monitor the market closely for merger and acquisition opportunities that can help us grow our business, at the same time as we strive for healthy organic growth.”

  • Ralph Lauren sales tumble

    After a slight uptick in performance at the close of last year, Ralph Lauren sales have tumbled.

    Compared to 2015 – when total revenues declined by 5 per cent, wholesale by 9 per cent, and retail by 3 per cent – the latest sales figures are decidedly weak.

    In the first quarter of the new fiscal year, net revenues fell for a fifth straight quarter, dropping 4 per cent to US$1.6 billion

    The wholesale numbers are wholly understandable and are thanks, in large part, to the car-crash that is the American department store channel. While Ralph Lauren has representation in stores like Macy’s the fact that its sales areas look like a flea-market do nothing to help the brand or its revenues. This is further exacerbated by the generally weak customer traffic at department stores across the past few months.

    The retail numbers are much more of a disappointment, and a concern given that this division delivers the largest chunk of revenue. Ralph Lauren has been keen to emphasise its Way Forward Plan, which it says is changing the operational structure of the business so that it can deliver growth. As much as many of the actions are prudent, it feels like the company has been turning itself around in perpetuity. At some point, these actions need to deliver growth – something they are currently failing to do at either the sales level, or on the bottom line where the company posted a $31 million operating loss for the quarter.

    Decisive action is needed to put the brand on the right track. This includes withdrawing from department stores like Macy’s which are now actively damaging the Ralph Lauren brand, and focusing only on more upscale department stores like Nordstrom and Neiman Marcus as sales channels.

    A proper brand review is also needed as Ralph Lauren has become muddled and confused and is simply not competing effectively against brands like Vineyard Vines, which have good traction with younger, high spending consumers. Some action has already been taken to simplify the brand structure but much more clarity is needed in communicating the various parts of the offer to consumers. At present the various parts of Ralph Lauren are too hit and miss.

    Reconnecting with younger consumers is also a priority. Rather like Tiffany, Ralph Lauren is seen as an older, established brand that, while not actively disliked, is less relevant than it was a generation ago. Spin-offs like Club Monaco and RRL have helped to remedy this, but the company needs to put more energy and effort around extending and expanding their reach.

    That said, current plans should deliver some cost savings over the course of this fiscal as operations are streamlined. However, expect the plan’s impact on revenue to be negative across at least the next quarter.

    • Håkon Helgesen is a retail analyst at Conlumino.
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  • India to capture 13.5% of smartphone sales by 2019

    India to capture 13.5% of smartphone sales by 2019

    India is on track to corner a 13.5% share (approximately 180 million smartphones in circulation) of the total global smartphone market by 2019, up from 7.5% today.

    This was revealed by a joint study conducted by the Associated Chambers of Chambers of Comerce & Industry of India (ASSOCHAM) and KPMG.

    The study noted that the advent of affordable smartphones designed for the Indian user and low-cost data connectivity options, more people are shifting to smartphones and mobile Internet.

    The average selling price of a smartphone in India in 2015 was 12,285 rupees ($183.70), a 25% year-on-year increase. The affordable models sell between 3,000 rupees and 10,000 rupees ($44.80 to $149.50).

    “The smartphone shipments in India grew a healthy 23% annually in the first quarter of 2016 compared to the global growth, which stalled for the first time ever since smartphones first began to sell,” ASSOCHAM said in a report posted in its website.

    “The increase in smartphone sales has changed the face of e-commerce industry in India in the last two years,” it added. “Mobile transactions accounted for 41% of total e-commerce sales in 2014. Developing a mobile (sometimes mobile only) strategy has been an important agenda for many of the leading e-commerce players in the country over the last two to three years.”

    The government has launched its ‘Digital India’ initiative in July 2015 for the different stakeholders to work together to transform the economy. Several international device vendors have also set up manufacturing facilities in India, supporting the government’s ‘Make in India’ initiative aimed at boosting local manufacturing.

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  • Alibaba sales soar on international expansion

    Alibaba sales soar on international expansion

    Alibaba sales have soared in the first quarter of its new fiscal year, with overall revenue growth pushing even higher than last quarter’s stellar result.

    Streaming entertainment and cloud computing boosted the business, driving revenue up 59 per cent in the June quarter to 32.15 billion yuan (US$4.8 billion).

    In a contrast to the last reporting period, it is international that has shown the most growth, with revenues rising by 123 per cent. Although this figure is aided by the consolidation of the Lazada business, it is also the result of some good numbers from AliExpress.

    That said, China retail remains the largest part of the group, accounting for just over 73 per cent of revenues. Here performance was strong, with revenues rising by 49 per cent – partly thanks to a combination of the addition of 11 million more active buyers and higher average transaction values over the prior quarter. A sharp increase in marketing spend by those brands and merchants using Alibaba’s various sites also made a significant contribution to the hike in revenues.

    Alibaba’s role as a facilitator for Western brands wanting to sell into China continues to be the company’s main commercial advantage. Its ability to work closely with those merchants to improve performance will benefit the revenue streams of both parties, as well as creating a more attractive and compelling offer for consumers.

    Despite its success at home, Alibaba has struggled to gain traction in already established markets like the US. While this was once a stated ambition, and perhaps remains a long term goal, it is off the agenda for the short term. This is the correct strategy: chasing lower margin, profit eroding international gains for the sake of vanity makes little sense.

    That said, this does not mean that Alibaba’s international ambitions are entirely on hold – as the latest results show. Tactically, Alibaba has decided to focus on high growth markets where commerce is more embryonic. The acquisition of a controlling interest in Lazada, the Southeast Asian eCommerce group, is testament to this.

    While Lazada has grown into a sizeable business, it has a number of challenges including on the delivery, payment and fulfilment front, where it has struggled to optimise the offering. Alibaba, through its expertise and financial muscle, should be able to remedy this. It will also, over the medium term, strengthen the international brands available making the site more compelling and interesting for shoppers.

    The Lazada model represents the approach Alibaba is likely to take to international growth and expansion, and this will yield good long term results.

    With both international and domestic sales forging ahead, and with new areas like cloud computing making a better contribution, Alibaba is firmly on an upward trajectory.

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  • Hour Glass Q1 net profit falls amid tough retail environment, slower economy

    Hour Glass Q1 net profit falls amid tough retail environment, slower economy

    The Hour Glass’ first-quarter net profit tumbled 22 per cent year on year to S$8.19 million.

    For the three months ended June 30, total revenue and other income fell 7 per cent to S$149.43 million from the previous year. The decline in revenue reflected the economic slowdown and tougher regional competition, it said.

    Q1 earnings per share slid to 1.16 Singapore cents from 1.49 Singapore cents in the preceding year.

    For the quarter, gross margin edged up to 22.9 per cent from 22.8 per cent a year ago.

    Meanwhile, rental costs were higher due to the expanded retail network.

    The Hour Glass said: “The continuing global economic uncertainty is expected to affect consumer sentiment and the demand for watches and luxury goods. Barring any unforeseen circumstances, the group expects to remain profitable for the financial year.”

  • Jollibee sales strongest in years

    Jollibee sales strongest in years

    Jollibee Foods Corp (JFC) has reported that its system-wide sales grew by 15.1 per cent in the second quarter compared to sales for the same period of 2015.

    For the first half of the year, sales of the Philippines’ largest foodservice company grew by 14.9 per cent to Php71 billion, while revenues grew 13.7 per cent to Php54 billion, compared with the first half of 2015. In the same period, profits rose by 14.8 per cent to Php3.1 billion from Php2.7 billion.

    JFC CEO Ernesto Tanmantiong said the Philippine business, which accounts for at least 80 per cent of the company’s worldwide sales, has been experiencing its strongest organic growth in many years.

    Tanmantiong said all brands performed ‘very well’ and he attributes the record growth to continued improvement in product quality and value offering supported by focused marketing campaigns, store expansion and renovation, low inflation rate, healthy growth of the country’s economy and election-related spending.

    Sales growth in the Philippines accelerated to 17.9 per cent in the second quarter, with brands growing in double digits.

    “Our business abroad had mixed performance. Southeast Asia grew by 37 per cent, led by Singapore with 56 per cent and Vietnam with 49 per cent. The Middle East rose by 17 per cent and the US increased by 11 per cent. China’s sales decreased by 5.7 per cent due to competitive pressure on Yonghe King, our largest brand there,” said Tanmantiong.

    “We look forward to a strong recovery of our Yonghe King business in the months ahead with the launch of new products with high value and taste scores supported by strong marketing campaigns and continuously building  a significant business in the People’s Republic of China and other parts  of the world.”

    JFC CFO Ysmael Baysa said:  “We look forward to continued strong profit growth while preparing for likely higher inflation rate in 2017 in the Philippines and other parts of the world and improving the profitability of our joint venture businesses.”

    JFC has a 50 per cent  interest in the following joint ventures with the number of stores indicated: Highlands Coffee (Vietnam, Philippines) 131, Pho 24 (Vietnam, Indonesia, Cambodia, Korea and Australia) 32, 12 Hotpot (China) 20, others 8; and a 40 per cent interest in Smashburger that has 366 outlets, mostly in the US.

    As of June 30, JFC was operating 2528 restaurant outlets in the country: Jollibee 939, Chowking 457, Greenwich 237, Red Ribbon 378, Mang Inasal 455 and Burger King 62. Abroad, it had 655 stores: Yonghe King (China) 321, Hong Zhuang Yuan (China) 40, San Pin Wang (China) 59, Dunkin’ Donuts (China) 4, Jollibee 151 (US 33, Vietnam 79, Brunei 14, Saudi Arabia 10, Qatar 2, Kuwait 4, Hong Kong 1, Singapore 4,  Bahrain 1 and UAE 3), Red Ribbon in the US 33, Chowking 44 (US 16, UAE 20, Qatar 4, Oman 2, Kuwait 1 and Saudi Arabia 1), Jinja Bar (US) 3.

    The JFC Group has 3183 stores worldwide.

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  • Asia leads Burger King sales growth

    Asia leads Burger King sales growth

    Burger King sales are growing faster in Asia than in any other part of the world, reports parent Restaurant Brands.

    Sales in Asia rose 5.3 per cent, according to the company’s second quarter earnings data released overnight. Latin America sales rose 4.9 per cent. The performance in those two markets was enough to offset a 0.8 per cent decline in same-restaurant sales across the US and Canada, resulting in flat global systemwide sales growth.

    The success in Asia comes at a time when rivals Yum Brands (parent of KFC and Pizza Hut) and McDonald’s are struggling to maintain growth in Asia, where both companies are trying to sell long-term franchise rights.

    It also partly explains why Restaurant Brands this week announced a priority of expanding its Tim Hortons coffee cafe brand into Asia, with the Philippines the first stop.

    The Asia and Latin American figures were high points in a result best described as “adequate”.

    However, Neil Saunders, CEO of Conlumino, observes that although the headline result of a 0.2 per cent decline in overall revenue looks somewhat gloomy, this is mostly the consequence of a strong US dollar and weak Canadian dollar, which especially affected revenues from Canadian-based Tim Hortons.

    “The underlying numbers are slightly better, with both divisions in positive territory on a comparable sales basis and system-wide sales up by 0.6 per cent even after the impact of exchange rate fluctuations.”

    Saunders says the loss of sales momentum from previous quarters is in line with recent numbers from rivals like McDonald’s and Yum.

    “This trend is being driven, primarily, by a slowdown in spending on eating out by American consumers.  The softness in the US market is disappointing given the initially positive reaction to menu changes and the introduction [by Burger King] of hot dogs. It underlines the fact that menu change and innovation is not now something that can be done periodically: fast food players need to see this as a constant process that has to be supported by ongoing promotions and marketing activity.”

    Saunders believes McDonald’s continues to hold a slight edge over Burger King, and is doing more to shake up its traditional business model to maintain consumer interest and drive growth.

    “All that noted, the one saving grace for Burger King is good cost control which allowed [pre-tax earnings] to grow by 3.7 per cent this quarter.

    “Overall, Restaurant Brands continues to make progress; but with spend tightening and competition intensifying it now needs to up the pace of innovation if it is to grow further,” concluded Saunders.

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  • Expansion brings some cash for VinMart

    Expansion brings some cash for VinMart

    Vietnamese supermarket chain VinMart has tripled its revenue in the second quarter of this year.

    Parent VinGroup says the group achieved VND2,465 billion (US$110.6 million) in sales of its supermarkets and convenience stores, a 226 per cent increase compared to the same period last year.

    One of the reasons for VinMart’s growth is the group’s strategy to bring its convenience stores VinMart+ to “every corner of Vietnam”, making it a part of consumers’ daily shopping routines.

    Up until July, after almost two years of operation, VinMart has 50 supermarkets and 830 convenience stores nationwide, which means the company has been opening three supermarkets a month and 46 c-stores.

    A standout of VinMart+ is the fresh food, distributed by green brand VinEco. The products are exclusive greenhouse vegetables, grown using Israeli technology.

    With this self-supply and self-control strategy, VinGroup has been creating a strong competitive strength in the market.

    Besides VinMart, its other divisions contributed to VinGroup’s profit in the quarter of VND 2,926 billion ($131.2 million): VinHomes, Vincom Retail, Vinpearl Land, Vinschool, Vinmec, and VinPro.

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