Sophia Feeds Chi Chi McDonald's McNuggets with Sauce!!

McDonalds: Im Lovin' It!

McDonalds has always been a target for the whakos and lefties in New Zealand for being one of those "evil, greedy" American companies that want to take over our culture, exploit workers. make us all fat buggers and give nothing back to the country but this piece in the New Zealand Herald out today proves that this is wrong on all counts:

McDonald's spent more than $145 million buying goods from local suppliers in 2009 - up $25 million on the year before, mostly due to increased sales.

He said McDonald's had been seeing strong growth in New Zealand in the two years prior to the financial crises, and the company used that time to improve its brand.

Much of the growth came from McDonald's new restaurants - 10 of which were opened last year as part of the company's three-year capital investment programme that will see $300 million invested, Hawthorne said.

He said the company was on track to open 10 new restaurants this year, the first being in Richmond, Nelson, next week.

He said McDonald's had spent the three years prior to the recession struggling to find enough workers, but those employment issues had faded with the downturn.

The company is expanding in a time of high unemployment, it currently directly employs more than 5000 people and indirectly through its suppliers many thousands more and has a distinctive New Zealand culture in its Kiwi businesses.

For franchise owners it also provides a long term opportunity to make some serious money from a good honest community minded business and for workers to have the ability to move from flipping burgers to owning an outlet.

The fast food industry fosters young people and can motivate the right people to better themselves, within and outside the sector.

I don't eat there myself, too expensive and unappealing to me, but the fact that they have 150 outlets and serve over 1 million meals every week means a large numer of New Zealanders love the place.

I love it too for all the positive reasons outlined above.


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Fast Food in New Zealand

Mcdonalds.co.nz
KFC.co.nz
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Related Amazon Reading

	McDonald's: Behind The Arches by John F. Love Buy new: $12.24 / Used from: $3.85 Usually ships in 24 hours
	Everything I Know About Business I Learned at McDonald's: The 7 Leadership Principles that Drive Break Out Success by Paul Facella Buy new: $16.47 / Used from: $5.70 Usually ships in 24 hours

Buy business books & more at fishpond.co.nz




c Share Investor 2010

Restaurant Brand's gives KFC a push

It will seem strange to regular readers of this blog for me to be praising Restaurant Brand's [RBD] management but after some reasonable on site research of one of the company's brands, KFC, I do believe they might have got one aspect of the company almost right.

Restaurant Brands is the franchisee operator of KFC, Pizza Hut and Starbucks and has had a very chequered operating past since listing in 1997. Sales have been declining, levels of service poor and menu and food quality dubious at the best of times. Profit and revenue have also consistently fallen in the last decade as a result of the poor management.

There has been a 2 year focus on KFC to resurrect the company's only profit maker. Millions have been spent to remodel the 89 store chain with new menu items to give the image of KFC and the Colonel's old deep fried chicken a healthier look and judging by my own survey of a couple of Auckland's North Shore stores, Takapuna and Browns Bay, the extensive rejig of the menu seems to be keeping declining customer numbers at an even keel.

The choice of salads, burger meals, various new types of snack foods and smaller chicken pieces from the old KFC menu make for more choices for customers but management risk diversifying too much and alienating their core customer (thats me folks) who still comes for the fried chicken, if they go further.

Stick to what you know guys and don't try to reinvent too much. McDonalds have just successfully redefined their menu in a healthier way, while adding a large chicken menu to their roster and too many similarities between the 2 chains chicken products should be avoided at all costs. KFC's main point of difference, and it has been that way for nearly 40 years in New Zealand, is their 11 herbs and spices recipe. Don't kill the very chicken that lays the golden stuff !

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Russel Creedy, who was appointed as CEO in September 2007, has made some good moves since his appointment and the continued development of KFC from previous management head Vicki Salmon has stemmed the previous hemorrhaging of the KFC unit.

What Creedy must do now though is consolidate his relative success at KFC and sell the loss making Pizza Hut New Zealand while there is someone willing to buy it.

Starbucks, while still growing revenue, mostly from inflation, is nonetheless still losing money overall and a sale back to the franchisor would be the best for all participants.

RBD management don't have the depth of expertise to manage 3 brands to the maximum benefit of their shareholders, and as proven ever so slightly so far, their concentration of efforts seems to be paying off at KFC.

Related links

RBD New Zealand
KFC NZ
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c Share Investor 2008

McDonalds Playing Chicken with KFC

McDonald's is going to take on KFC at their own game and the head of Restaurant Brands Ltd [RBD.NZX] replies to the war cry of MD of McDonald's Mark Hawthorne:

Chief operating officer Rod de Vries said sales had increased 9 per cent in the past year - an outstanding result in a highly competitive market. "It is therefore no great surprise that our competitors will try for the same success in our market and challenge our menu offering.

"However, we are confident that KFC will continue to hold the recipe for success in our industry and that consumers will continue to love the secret blend of 11 herbs & spices that Colonel Sanders perfected in 1939.

Full NZ Herald Story

A very logical and understandable reply from the head of Restaurant Brands, in reply to news out today that McDonald's New Zealand is going head to head with KFC to try and knock the Colonel of his lonely perch.

KFC have to respond to the superior marketing and
service levels of McDonald's to keep their chicken market
share.

As Warren Buffett says, he looks for companies with a "moat", that is, a unique product or company that has high barriers to entry and therefore stable and sustainable cash flows. KFC is certainly that. Nobody else has ever managed to get the 11 secret herbs and spices down pat and nor are they likely to and that is the main advantage that KFC has.

The uniqueness of their taste is their secret to their 69 year old history.

Unfortunately for KFC in New Zealand we have heard this all before from Restaurant Brands, "we will take competition seriously" blah, blah. Witness the Pizza Hut meltdown after competition has decimated that brand. I still think RBD management underestimate their rivals and over rely on the strength of the KFC product when going head to head.

McDonald's Vs RBD, I will pick Maccas every time, because management there are smart and know all about service, imagine what they would do at KFC.



KFC's chicken dominance is going to be severely tested by the McDonald's
competition but KFC have a unique product that loyal customers love.


McDonald's are going for an all out assault on KFC's dominance and are going for quality and range in their chicken offerings. Breast meat and real chicken will be the order of the day. They will take market share off KFC, that is clear. How much market share is up to how RBD management react to the competition.

RBD have a great product but where Maccas will beat them is at service and marketing and that is half the battle.

In the USA and Australia this battle has been fought and lost by KFC and the Big Mac has intentions to be no1 here within 3 years, so history could be repeated here.

The McDonald's saturation advertising has already started. It will be interesting to see what the RBD response will be.

Keep up to date with this development at the Share Investor Blog .


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RBD - 2010 Quarter one sales
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Restaurant Brands Ltd: KFC has finally cracked it
Restaurant Brands: KFC Sales Figures Explained - Part 2
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Chart of the Week: Restaurant Brands Ltd
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Pizza Hut sell-off provide opportunities all-round
Danny Diab & Restaurant Brands
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Starbuck's New Zealand Cup doesn't runneth over
RBD gives KFC a push
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RBD saga continues: CEO leaves
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Discuss RBD @ Share Investor Forum
Download RBD company reports




c Share Investor 2008