KEY POINTS:
Fast food firm Restaurant Brands has delivered a mix of good and bad news in its latest sales results.
The bad news is that same store sales for its 100 Pizza Hut outlets fell by 4 per cent for the second quarter to September 10, 2007.
And that
is an unsavoury topping to the 2006 figures which were already down 17 per cent on the previous year.
But new chief executive Russel Creedy says the good news is that the decline is a lot better than the 8 per cent fall for same store sales the first quarter.
Same store sales remove the effect of outlets being closed or new outlets opened, and give a better indication of how retail companies are performing.
Creedy is upbeat about the losses but acknowledges Pizza Hut will not be increasing its sales anytime soon.
"This business is not expected to generate positive same store sales growth until the end of the financial year," he said.
The company's top selling chain - KFC with 87 stores - is picking up some of the losses.
Forsyth Barr retail analyst Guy Hallwright said the good news story around KFC was being overlooked but the Pizza Hut fall on top of 17 per cent last year was disappointing.
Certainly Restaurant Brands' two main chains are moving in different directions.
KFC same store sales went up by 9.3 per cent in the second quarter, more than twice the rate that Pizza Hut was going down.
Creedy said solid growth at KFC was due mostly to a revitalised marketing scheme that built on store refurbishment that has meant makeovers of 24 stores. Pizza Hut was also benefitting from a new marketing campaign, pricing simplification and new product releases.
There was also an increased focus on in-store operating performance which had all helped arrest this sales decline. The smallest brand, Starbucks, delivered the fifteenth consecutive increase in same store sales. Store numbers remained at 46 compared to 45 at the same period last year.
Meanwhile the company is still mopping up the problems at its Pizza Hut chain in Victoria.
Creedy said that of the original 50 outlets it owned only 11 remained, and at the end of the first quarter one had been sold, and four were subject to sale agreements.
He said settlement was a slow process partly because of complex lease and franchise arrangements.
Hallwright said the statement appeared to be a backward step from previous predictions - indicating that some store sales had fallen through.
Eagle boys move 'big mistake'
Restaurant Brands made a big mistake when it folded the Eagle Boys chain into Pizza Hut back in 2000, says arch rival Domino's Pizza Australia and New Zealand.
Chief executive Don Meij said the strategic decision to buy Eagle Boys for $23 million then close the brand set up Pizza Hut to be crushed between Hell Pizza and Domino's.
"They opened the door for us to come in to New Zealand," said Meij who was in New Zealand this week for motivational lectures to franchisees for 64 stores.
"We would have been another brand and it would have been very hard to break in as the fourth player in the New Zealand market," said Meij.
The Austalia-based company owns master franchises for Australasia and runs chains in the Netherlands, Belgium and France.
Meij is relishing troubles at Pizza Hut.
He sees good prospects as Domino's aims to open 25 new stores in the next two years focused on regional centres.
Meij says the New Zealand pizza market has grown significantly over the past four years but growth would peter out over two to three years as the market matured.
