Steady growth in the previously unfavourable Starbucks brand has boosted first-half sales for the country's largest fast food operator, Restaurant Brands.
In previous years the Starbucks brand had performed poorly compared with the company's other fast food outlets, which includes KFC, Pizza Hut and Carl's Jr., however recent restructuring and the closure of several unprofitable Starbucks stores over the last year, as well as a focus on customer service, has seen sales in the brand increase.
Starbucks total store sales rose 5.2 per cent to $13.9 million, while on a same-store basis sales increased 7.6 per cent to $13.9 million, as the chain benefited from better value and improved customer experience initiatives implemented over the past two years, it said.
Restaurant Brands boosted first-half sales 13 per cent with total store sales up $210 million in the 28 weeks ended September 14, from $185.7 million a year earlier.
On a same-store basis sales increased 6.7 per cent to $192 million. It had a total of 180 stores across its KFC, Carl's Jr, Starbucks Coffee and Pizza Hut brands, six more than a year earlier.
Its KFC brand, which makes up more than two thirds of revenue, increased total store sales 12 per cent to $153.2 million while same-store sales rose 8.8 per cent. Restaurant Brands has been refurbishing stores and spending more on marketing, including KFC's successful promotion of the "Double Down" option and the "Family Favourites Bucket."
Carl's Jr, the company's newest brand, increased total store sales 108 per cent to $18.4 million, but on a same-store basis sales slipped 6.8 per cent to $8.2 million. The company doubled the number of stores to 18, as it opened new shop fronts and brought back stores under its management, buying them from franchisees.
Pizza Hut sales fell 7.3 per cent to $24.5 million on a total store basis, while same-stores sales slipped 0.4 per cent to $23.9 million. The company is exiting stores in line with its plan to sell underperforming outlets to franchisees, and had reduced it to 44 at balance date from 49 a year earlier.
Restaurant Brands expected to release its full first-half sales next Tuesday.
The shares last traded at $3.78 and have gained 3 per cent since the start of the year.
- Additional reporting Businessdesk