Restaurant Brands sales hit by store closures

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Restaurant Brands New Zealand, the fast food franchise operator, reported a 4.4 per cent fall in first-quarter sales as the February earthquake in Christchurch keeps stores closed at a cost of some $2.5 million.

The Auckland-based company sold $72.5 million worth of food in the three months ended May 23 compared to $75.9 million a year earlier, with Pizza Hut and Starbucks outlets struggling to attract customers.

Though earnings have been hit by the Christchurch quake, Restaurant Brands said business interruption insurance policies mean profit won't be significantly impacted.

Fried chicken outlet KFC continued to be the company's stellar performer, lifting total sales 2.8 per cent to $55.8 million in a period which caught two weeks of an advertising campaign that captured mainstream news media due to the high level of fat of a new product.

Last month, Restaurant Brands reported a 24 per cent gain in full-year earnings to $24.3 million, but warned the tough retail market will put pressure on future growth. The shares were unchanged at $2.72 in trading yesterday, and have crept up 3 per cent this year.

There were three more KFC stores at the end of the quarter at 89, and on a same-store basis, revenue rose 0.3 per cent to $51.9 million.

Sales at the Pizza Hut stores slumped 28% to $10.6 million, with 12 fewer stores in the period at 79 as Restaurant Brands sold seven outlets to franchisees and closed five. On a same store basis revenue dropped 16 per cent to $10.6 million.

Starbucks sales dropped 11 per cent to $6.1 million in the quarter with four stores closed due to the earthquake, and on a same store basis, sales rose 4.3 per cent to $6.1 million.

There were 36 coffee outlets operating in the quarter.