Bollard sits on his hands

Alan Bollard rattled his sabre again last week.

Keeping the cash rate at 8.25% while telling us inflation was a risk down the road.

Well helloooo! could one of the reasons to the risk of inflation be your 4 rate hikes this year and multiple ones over the last few years?

The short answer is yes but the less interesting answer is that Bollard is clearly out of his depth.

Barely able to see over the rims of his accountant style glasses, he rarely has the vision to see further than what happens from day to day..

Instead of dropping the cash rate, as he should have, he risks putting the New Zealand economy at the sort of risk the Labour Government has put it under for the last 8 stifling years.

Labour did it with world record breaking high taxes, removing cash and investment from the economy and Bollard did it with the worlds highest interest rates outside the worlds other banana republics, ditto removing cash from street level and strangling productive investment, savings and business.

World economies are cutting rates to stimulate economies and Bollard sits on his hands. It looks like he will only move once the economic cycle we are in is in the middle of a meltdown.


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c Share Investor 2007

Restaurant Brands: No reason for optimism in latest sales figures

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.



Restaurant Brands @ Share Investor

Finger Lick'n Good Management
Chart of the Week: Restaurant Brands Ltd
Long Term View: Restaurant Brands Ltd
Stock of Week: Restaurant Brands Ltd
Restaurant Brands: Buy or Sell ?
Pizza Hut sell-off provide opportunities all-round
Danny Diab & Restaurant Brands
2008-2009 KFC sales figures mislead investors
KFC Finally Flying
Starbuck's New Zealand Cup doesn't runneth over
RBD gives KFC a push
McDonald's playing chicken with KFC
Restaurant Brand's Pizza Hut faces increasing competition
RBD sales analysis
RBD saga continues: CEO leaves
The secret recipe is out
2007 FY profit analysis
Delivering increased profit in October 2007
No reason for optimism in latest sales figures

Discuss RBD @ Share Investor Forum

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c Share Investor 2007

Electoral Finance Bill debate continues

Emmerson: "Power Junkie", NZ Herald Nov 27, 2007

The fascist Electoral Finance Bill gets debated again in Parliament at 2.00pm again today.

This is a huge week in our little democracy, the biggest since the constitutional change in our courts when the Privy Council was removed without public debate or notification and when a law was passed in 2006 making the stealing of $800,000.00 in public money by the Labour Party to buy the 2005 election, legal after the fact.

Let your MP and indeed Aunty Helen know what you think about this attack on our freedom.
Email them here

The bill is likely to be passed this week but if you show your opposition now, before you are forced to shut your gob next year, then, well, who knows.

You have got to be optimistic until the fat politician sings.


Below is what Helen Clark thinks of the Herald's stand against this bill. She blames the papers stance on the EFB as electioneering and its coverage misleading. The very things her minions in Wellington are doing and those Labour party members directed to write to papers and call talkback stations.

Her own minister, Annette King doesn't even understand the Bill! Mind you nobody can because it is so rushed. Its contradictory, badly written and lacks specifics.

Don't worry though, former dental nurse King, says we can interpret the Bill/Act, "with the law of commonsense".

5:00AM Tuesday December 11, 2007
By Claire Trevett , NZ Herald.

• Last-minute bid on bill set to fail
• Lincoln Tan: Freedoms in the balance

Prime Minister Helen Clark has given a biting appraisal of the media, saying it often lacked depth and taking a swipe at the Herald for its coverage of the Electoral Finance Bill.

Speaking to the Journalism Education Association conference in Wellington, the Prime Minister said fairness and balance were key responsibilities.

With clear reference to the Herald's campaign against the Electoral Finance Bill, she said "fairness and balance is in the eyes of the beholder".

"In my experience, after many years in politics it doesn't pay to be too thin-skinned about this. Actually, we put up with quite a lot, especially when a newspaper is in full campaign mode, like the Herald is at the moment, and it can run for weeks, if not months, with full-blooded attack, front-page headline, opinion editorials, editorials, attack stories, cartoons, you name it."

C Political Animal 2007

Retailers are having a Christmas sale

New Zealand Retail stocks are getting a real bashing at the moment and it seems the market sentiment for this is a lot of media attention about "price slashing" sales before Christmas.

Of course there is good reason to believe that margins will be affected because of discounts. Couple that with the high interest rates, a low US dollar impacting on NZ retailers with an international presence, uncertain seasons driving apparel retailers crazy and gas prices that have had a negative impact on sales through 2007 and you are going to see downward share price movements.

A Hallenstein's store interior

2008 probably isn't going to be much better, with more of the same experience from 2007, so you could see retail share prices continue to go south.

In my opinion though the market has overreacted to the negative news and there are some bargains to be had in retailing stocks.

Hallensteins Glassons, which I'm thinking of adding to my portfolio and has a dividend of over 10% net, hit a low today of NZ$3.84 after hitting the mid 5 bucks earlier this year, while Pumpkin Patch has sunk to $2.60 after almost reaching the magic $5.00 mark only months ago.

Before the High Court dismissal of the Commerce Commission decision to reject two prospective buyers of The Warehouse, its share price was drifting below 5 bucks and that companies sales have slowed and margins contacted and 2008 looks flat to ordinary.

Postie Plus made a loss earlier in the first half of this year and directors are pessimistic for the festive season, while Briscoe Group took a hit to their profit with a 15% dip in recent earnings.

The pressure hasn't hurt the likes of Michael Hill or Restaurant Brand's share prices too much in comparison to others, in fact RBD share prices has gone up while MHI share price has come off recent highs even though profit is up for the year.

That surely shows that market sentiment is punishing retailing stocks down too far.

Like every other sector of the economy retailing has its ups and downs and it is flat to negative at the moment but it wont last. Just like the sales that the retailers are having now and will have over the summer period, retail stocks are having their own sale.

Its up to you which retailer you are going to buy but it really makes sense to add to the long term portfolio when there is a sale happening.

Disclosure: I own Micheal Hill, Warehouse, Postie Plus and Pumpkin Patch shares


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c Share Investor 2007