Frankly if Van Arkel doesn't know why 2007 3rd quarter sales at Restaurant Brands Ltd [RBD.NZ] Pizza Hut are sliding and surmises that one reason might be that Pizza Hut customers are now shopping at KFC because of the marketing then I'm surprised if he knows what day of the week it is.
Has van Arcle ever ordered a Pizza from his own company?
I don't think so, because if he did he would find out the reason why Pizza Hut sales are doing a Hindenburg.
Its truly a horrible experience getting a pizza from this company. With phone customers there are inaccurate orders taken and the in-store experience with waiting times, if you can get past the surly staff, is quite often something akin to waiting for Led Zeppelin reform(OK, hang on they have, The Beatles then)
Customers are simply voting to go elsewhere, mostly Dominoes, where they get better food, service, prices and a ten minute wait.
A new "cheesy crust" pizza is picked to rescue sales in the coming quarter!
There is also talk of a "new look" for Pizza Hut next year. More capital expense and suffering shareholders as a result.
It really is the same crap from this management every sales/profit announcement, some lame excuse why sales are bad and promises that some new marketing scheme or food item will reverse fortunes.
Never a finger pointing at bad service, at themselves.
Increased KFC sales through the "transformation" of stores are being disingenuous to say the least.
Management are siting "record" sales at its fried chicken restaurants but the facts are that the year they might be comparing this latest result to, 2002, KFC did $177.1 million in sales.
If you add the 2007 cumulative 3 quarter total of $151.8 Million to say a generous $48 million final quarter, you are still just shy of $200 million, an approximate 12% rise in dollar sales since 2002. Factoring in a generous 3% annual inflation since then though and sales are 3% down since their record listed year in 2002.
If you add in the increased wages bills, power, ingredients and store refurbishment costs you can see management are still way behind the 8 ball.
And they have Red Rooster, Nandos and Oporto nipping at their heals. Red Rooster will be a big problem for them in the future as their food and service levels are far higher in my experience and they are a full service QSR, with drive through takeaway and sit down.
What can one say about their Starbucks units. Sales are increasing but still yet to turn a profit on top of horrendous overheads, especially lease arrangements.
Regular readers of my columns on this subject will have heard this before. Restaurant Brands needs a clean our from the top, a new head and associated management and a new service focused direction.
Dressing up stores is only going to last song long, putting the S back in service will keep customers coming back for more.
On a more positive note for the company, its shares were up by 1c today to 91c.
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Secret Recipe: Why KFC Is Still Cooking After 50 Years by Robert Darden
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