QSRH, Pieface, Sumo Salad, GYG and KFC talk growth strategies
More regionalization, bigger stores and more drive-thru operations are just some of the strategies for growth for the industry.
Major players in the industry discussed their future plans for growth in the recently concluded QSR Media Leaders Luncheon.
Sumo Salad plans to focus on regional locations. Luke Baylis, the Managing Director of Sumo Salad says they plan to look at smaller towns with populations of 50,000 and above. “A large part of our business is trying to get outside of shopping centers. Rents are continuously increasing and every year, you go backwards unless you’re maintaining about 8% growth. On a high street, you might be able to get a rental around 6-10% of your occupancy total revenue. Whereas, you look at shopping centers and they’re trying to get you around 20 -25% if you’re a specialized retailer. And they know your turnover because you have to disclose it, particularly when you go through a renewal process. So we’re trying to expand away from that. Because it comes down to being able to make strong commercial returns and that’s a very important part for us.”
Ben Macpherson, CMO of Pieface says that most of their stores are actually open 24 hours and that it was one of the best format developments they did early on. “Surprisingly, it actually lowers labor cost because there’s less labor cost in opening and closing and there’s building traffic in those sort of odd day parts,” he said.
“We’re also looking into drive through and drive up. We’re also looking at regional as well. Regional shopping centers are pretty much on par with CBD and high density urban shopping centers, in terms of rent cost. But they’ve typically got slightly lower traffic count. But I can honestly say that the best expansion strategy for us is overseas,” he adds.
Guzman Y Gomez’ Managing Director Steve Marks says that they’re planning to open stores that are a lot bigger than what they have now. “We’ve opened up a store in Fortitude Valley in Brisbane, it’s got about 90 seats and that’s 50% more in trade that any of our other stores. The stores here are getting pretty busy. So we’re opening up the next store in Cronulla. It’ll be about 80-90 seats. Besides those stores, we’re trying to find a nice mix of CBD trade,” he said.
The growth for KFC Australia, on the other hand, is in menu expansion, according to Managing Director Tony Lowings. “Day part lunch and snacking, early morning breakfast, and things like that, you see more and more people playing into that space. It really boils down to the whole convenience factor. Use of drive through has grown over the last ten years. And I think it will continue to grow, giving people access to the brand and access to the food in a more convenient way. Through ordering techniques, we’ve been able to get their food in a simpler and quicker manner,” he said.
Lowings believes that the company’s use of drive-thru will continue to grow, giving people access to the brand and access to the food in a more convenient way through ordering techniques that will be able to get their food in a simple and more efficient manner.
QSRH’s CEO, Mark Lindsay says that for them it’s all about ensuring that each brand is positioned properly within the market space. “Internationally, we are exposed to New Zealand, UK, China and the US. We see huge opportunity in Australia, just the domestic front in each of the three brands—to grow those brands individually in their own right. Particularly, on the eastern seaboard,” he said.
It seems like consumers will be the big winners out of the changes and growth strategies being adopted by the industry.
