Thursday, March 15, 2007

Restaurant Brands Saga Continues(CEO Leaves)

So...Vicki Salmon has been swimming against the river of opinion for her to go and finally she has. Has it has taken her 10 years to decide that the fortunes of RBD are gradually in decline or has she milked enough moola as a director and CEO, 1.2M over the last 4 years and around the same for the previous 6 years, that she figured it was time to go.

I have been critical of her since her placement as head chef at RBD and she has more than lived up to my low expectations of her. Under her stewardship profit has declined more than under her predecessor and service levels and food quality at KFC and Pizza Hut have resembled a similar flight path much the same as the proverbial flightless bird the kiwi.

I made a comment about her flashy dress-sense at the time of her placement as CEO, calling her in effect a "Flash Harry" ; all image and little substance. Her continual emphasis on how stores looked and how marketing was done was continually being let down by the complete disregard to service and the customer experience.

Competitors in this hard fought industry have overtaken RBDs past dominance of the QSR sector and real sales and profit continue to slip.

Analysts and financial commentators continue to trumpet Vicki's' "success" in the turnaround of KFCs' fortunes. What bloody turnaround would that be? 5M dollars more sold than their best year, behind when inflation is taken into account by 25-30% and even further behind when one considers recent stats indicating very healthy increases in the fast food sector.

How bad does one have to be as a CEO to be given the rooster?

Sadly , Vicki leaving/being pushed ain't gonna cut it either. When you consider the poor calibre of management ,just below Vicki, at board level and then the detritus that makes up region, area and store managers then as a share holder you would have to be worried that the management direction of RBD, will be, like the aforementioned Salmon, have RBDs' fortunes swimming weakly upstream.

c Share Investor 2007