KFC and Pizza Hut shine in third quarter

By Phil Boeyen, ShareChat Business News Editor

Tuesday 18th September 2001

Fast food operator Restaurant Brands (NZSE: RBD) has delivered growth in same-store sales for both its Pizza Hut and KFC franchises although there's been a slight drop at Starbucks.

Total third quarter sales for the 12 weeks to September 10 were up 14.3% on the same time last year at $60.5 million compared with $53 million.

In particular same-store sales at Pizza Hut have shown strong growth, rising 11.6% on the same period last year. Total pizza sales hit $16.1million, up 46% on last year due to the takeover of the Eagle Boys brand.

Chief executive Jim Collier says it is the first quarter since the expansion of Pizza Hut that same store sales comparisons have been available and the data is only for those stores that were converted to Pizza Hut during the third quarter of 2000.

While Restaurant Brands has aimed to reduce its reliance on KFC, the fried chicken outlets still accounted for 67% of sales in the third quarter, rising 2.8% to $40.6 million.

That's a good showing by the franchise, which has previously been losing steam.

Mr Collier says the improvement was due to stronger economic conditions and the success of new product initiatives such as Popcorn Chicken.

Total Starbucks sales for the third quarter rose 54% on the previous year to $3.9 million but same store sales declined by 1.2%.

"Starbucks same store sales growth is lower than previous quarters due to rolling over a price increase in the third quarter of 2000. That increase was due to the impact of the New Zealand dollar depreciation on coffee bean prices," says Mr Collier.

"Total Starbucks sales are expected to continue to expand rapidly although same store sales growth is expected to remain subdued until the first quarter of 2002."

RBD is continuing the rapid rollout of its coffee franchise, opening six new Starbucks stores during the recent quarter to take the total number of stores to 26. There are plans to open another four stores before the end of the year.

The company is also heading towards a distribution milestone and says it will open its 200th outlet in the fourth quarter.

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