Forum Archive Index - February 2003

["tennyson@caverock.net.nz" <tennyson@caverock.net.nz>]

Hi Ben,


> 
>Perhaps - but even if that is the case does RBD have pockets as deep
>as Domino's (Competitive Foods Australia), Red Rooster (Coles
>Meyer), McDonald's (McDonald's Corp), KFC (Yum Restaurants) etc to
>survive a sustained price war?  These are all very large companies
>that can lose considerable amounts of dollars for market share.  
>
>



I don't think there is a threat to RBD from Yum Restaurants.  Since 
Yum are the ultimate franchise owner of Pizza Hut, and RBD pays 
substantial royalties to YUM, I don't think YUM will be biting the 
hand that feeds it.

'The Australian' article read as though Dominos is an American brand, 
so I presume the push is being made by the Australian sub franchise 
owner 'Competitive Foods Australia'.  Is 'Competitive Foods 
Australia' listed?  It might make an interesting benchmark to put up 
against RBD.

Some of those US companies you mentioned have very heavily geared 
balance sheets, and trouble at home.  I'm not sure if they would have 
management support for a big push overseas at this time.

However, I don't think any of this is news for RBD management.  
Collier knew exactly what he was getting into when moving into 
Victoria Australia.  That's what he sold off all the New Zealand real 
estate for.  To deepen the RBD pockets for just such a campaign.



>
>
>I don't think that RBD shareholders will be as generous with pouring
>money down the drain - or forgiving.
>
>


The RBD share price certainly got a mauling in the middle of last 
year when the Victorian venture wasn't immediately profitable,
didn't it?  However, I don't think a cash issue is on the RBD 
horizon.


>
> 
>Specifically in the pizza market, Domino's is *very* aggressive. 
>There's constant TV advertising and branding campaigns, along with a
>steady stream of new flavour combinations.  From my perception here
>in Sydney, it would appear that Domino's is expanding its market at
>the expense of Pizza Hut. The situation may be different in
>Victoria.
> 
>

Thanks for the 'on the ground' observations Ben, very valuable to 
those 'on the other side of the ditch'.   Any Victorian scouts out 
there that can report in for us?

SNOOPY

discl: hold RBD

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