Forum Archive Index - January 2004

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

I recently spent twelve days in Victoria, Southern New South Wales 
and Sydney, and took note while I was there of the various fast food 
operations I came across.

My brief impression, formed from just a few hours in Melbourne  and a 
few days in Sydney is that the Australian takeaway food market is 
much more fractured than the NZ market.

The big brands (McDonalds, Hungry Jacks and KFC) are there in force 
and have a good roadside presence.   But there is a very large 
proportion of smaller scale businesses.   Pizza Hutt seemed almost 
invisible.     I only saw one outlet in the 5 days I was in Victoria, and 
only one PH outlet in Sydney, that being a relatively obscure 'first floor' 
operation.   RBD has decided to concentrate on the delivery market, so 
that makes my observation not so surprising.   If customers phone you, 
and you deliver to them it doesn't really matter if the business is 
located down an obscure side street.

There is plenty of competition in the Pizza market in Oz.   Pizza Hutt is 
a significant player, but judging from what I saw this means 5% of the 
pizza market, not 30% as in NZ.   There are lots of independent Pizza 
places.    Australia has a size of Pizza that is one larger than the 
'family' Pizzas we get here in NZ.      By surface area the Oz family 
Pizza looks about twice as big as the NZ one.   This means one slice 
can do you for a whole lunch.     Because of the larger populations in 
Sydney and Melbourne you can buy a fresh slice of pre-prepared 
Pizza from a specialized Pizza shop without it having time to 'frizzle up' 
in the warmer.    A huge slice of fresh gourmet Pizza for $A3.50 must 
represent tough competition for the likes of Pizza Hutt!

Aussies are more than willing to buy mainstream takeaway food from 
'small operators'.    There is a large ethnic population in both Sydney 
and Melbourne and standards are high.      I was amazed to go into a 
food court in a large shopping centre in Sydney and not see a single 
food brand I recognized.    Even the golden arches were nowhere to be
 found!   To some extent I am echoing Karyn's comments on this forum 
from late 2003.     There is a lot of good quality competition in Victoria/ 
NSW.    I am sorry the gourmet pizza promotion in Victoria failed, but I 
hope that RBD has learned something from it.

Danny Diab, apparently makes a great success of his own Pizza Hutt 
restaurants in New South Wales, and possibly this is concentrating on 
the 'value' end of the market.   I am sure there is a niche there than 
RBD can fill in Victoria.   I can't see PH Victoria as being the potential 
money spinner the NZ Pizza Hutt operation is.   I know there are many 
critics of both on this forum, but I don't think the average sharechatter 
is necessarily representative of the kind of customers that PH targets. 
Unlike Karyn, I'm not writing RBD off in Oz just yet!

The other lasting impression I had from downtown Sydney was 
'Starbucks everywhere'.    There has been talk of the cannibalisation of 
store sales in NZ and too many outlets, but store cannibalisation must 
surely exist in Sydney too?   Visually having Starbucks stores within 
shouting distance of each other does seem to be how the brand 'works' 
overseas.    But in NZ I'm not sure that the field of dreams philosophy 
('build the stores and they will come') is enough.  With our smaller 
population do RBD *really* understand how to get the Starbucks brand 
operating profitably in NZ?

Yes I think that RBD has a rocky few months ahead of it, but the low 
entry price around $1.20 last time I looked, more than compensates for 
the risk.

SNOOPY


hold: RBD

PS  I can't let this post go without commentatiing on the other 'Vic' 
factor, the new CEO Vicky Salmon.     It is good that she has upped 
her shareholding in the company by buying 'on market'.  Having said 
that it would be surprising if the new CEO didn't want to take a 
significant personal stake in the business.  I would normally give the 
new CEO a honeymoon period.  But Salmon has been on the board for 
years and, IMMSMC, was the instigator in establishing the Starbucks 
business.     For that reason I don't regard her as 'new', so I am 
prepared to stick the boot in.   I agree with 'greasychicken', in that I 
would have preferred to see a fresh appointment made from outside 
the company.  

In hindsight, perhaps ex-CEO Collier focussed too much of his 
attention on Pizza Hutt.    Will CEO Salmon be able to raise her eyes 
above her coffee cup for long enough do do something about that low 
flying bird that has lost so many feathers, KFC?



--
Message posted by Harry Tennyson
 using Pegasus Mail 4.02
I have Word 97 to read attachments
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