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Retail Food Group and Collins Foods franchises look to buck retail gloom

Tuesday, 4 December 2012 | By Michelle Hammond

Food franchise giants Retail Food Group and Collins Foods have painted a positive outlook for their brands, despite a recent fall in retail sales for cafés, restaurants and takeaway food services.

 

RFG is the franchisor of the Donut King, Michel’s Patisserie, Brumby’s Bakery, bb’s café, Esquires Coffee Houses, The Coffee Guy, Pizza Capers and Crust Gourmet Pizzas.

 

At its annual general meeting, chief executive Tony Alford told shareholders the RFG brands performed strongly in 2012 despite the challenges facing the retail sector.

 

“Whilst not immune to them, each of the brand systems under RFG management are well positioned to endure challenges within the retail industry,” Alford said.

 

RFG posted a net profit of $28.5 million for fiscal 2012, up 4.9% on the previous year.

 

It’s been a big year for RFG, which acquired Pizza Capers, Crust Gourmet Pizzas and The Coffee Guy in the space of a few months.

 

According to RFG chairman Bruce Hancox, the additional brands will help to grow the business, which already has around 1,400 outlets.

 

In addition to acquisitions, RFG recently revealed details about its training academy, which opened in April last year.

 

During 2011-12, the facility trained more than 200 franchisees, which, according to RFG, is the highest number the company has ever trained in a 12-month period.

 

But RFG isn’t the only major food franchisor in the midst of a growth phase.

 

Collins Foods, which operates 122 KFC outlets in Queensland and 27 Sizzler restaurants in Australia, has predicted continued sales growth for both brands on the back of improved retail conditions in Queensland.

 

The company posted a $7.4 million profit for the half year to October 14. This is a massive boost on the $600,000 profit made during the first half of 2012.

 

The company is confident sales growth will continue into the 2013 second half. However, chief executive Kevin Perkins has admitted the return to profitability was largely driven by KFC.

 

“While we have also seen evidence of improvement in the underlying Sizzler business, the casual dining segment appears to be lagging,” Perkins told AAP.

 

“People still like us a lot – they just don’t eat out as often. Meals at home are up and maybe that’s a bit to do with MasterChef and the work Coles and Woolworths are doing.”

 

The news comes on the back of the latest retail trade figures from the Australian Bureau of Statistics, which show retail turnover was flat in October following a rise of 0.5% in September.

 

The only industry to rise in October was food retailing, up 0.9%, while sales for cafes, restaurants and takeaway food services fell 0.3%.

 

Over the longer term, food retailing remains the strongest performing industry, up 0.5% in trend terms.