By SIMON HENDERY retail writer
Fast food operator Restaurant Brands has expanded its pizza empire into Australia, buying 51 of Victoria's 60 Pizza Hut outlets.
The company is spending A$11.8 million ($14.4 million) to buy 11 outlets from a receiver and 40 from seven of the state's Pizza Hut franchisees.
It hopes what
it sees as a low-cost entry into Australia will eventually be rewarded by growing Pizza Hut's slice of the Victorian pizza market.
Pizza Hut has a 15 per cent share of the state's pizza market, which is dominated by small independent operators.
There are a million more people in Victoria than New Zealand, but 25 fewer Pizza Hut outlets.
Restaurant Brands chief executive Jim Collier, himself an Australian, said the Australian expansion was the next phase of Restaurant Brands' plans to diversify its earnings, which have been dominated by the maturing KFC business.
Collier said a refurbishment programme aimed at increasing sales through the Victoria Pizza Huts would begin immediately, and overheads would be cut by introducing New Zealand operating systems and running accounting and payroll operations from this country.
The Australian business is expected to make a positive contribution to the company's earnings within two years.
While the Australian fast food market is fiercely competitive, analysts said yesterday that Restaurant Brands would try to push the delivery side of the business, rather than compete on price.
"The acquisition price appears relatively good," one analyst said.
"There is significant upside for them if they can get it right. The Pizza Hut business in Victoria has been run down and they have been able to pick it up cheaply."
Under the deal, Restaurant Brands will become Australia's largest Pizza Hut franchisee. The Pizza Hut brand is owned by US fastfood giant Tricon Global Restaurants, which also owns Taco Bell and KFC.
Restaurant Brands' Victorian business will be run by former Eagle Boys chief Kurt Whitlow, who is now general manager of Pizza Hut in New Zealand.
