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CRG budgets Bt1.4 bn for expansion

Mar 13. 2019
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By KWANCHAI RUNGFAPAISARN
THE NATION

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CENTRAL Restaurants Group (CRG) yesterday announced its three-year business plan to invest Bt1.4 billion for expansion and renovation of its restaurants, as well as improve its business infrastructure including the IT system.

Under the budget, the number of branded restaurants in the CRG portfolio will dramatically increase from 990 outlets as of February this year to more than 1,500 by 2022. About 100 new branded restaurants will be opened annually. The company also plans to open about 130 restaurant outlets this year.

CRG president Nath Vongpanich said that about Bt730 million of the budget will be allocated to the new branch openings, while another Bt250 million will be for renovating its existing restaurants. About Bt330 million will be also allocated for maintenance and upgrading of its IT system, and about Bt570 million for marketing.

“This year, we expect our total revenue to grow 12 per cent over last year to about Bt13.4 billion. We expect our annual revenue to reach Bt20 billion by 2022,” said Nath.

“We hope to have a total of 1,500 restaurant outlets by 2022, opening about 100 new outlets every year. We expect to have about 5 per cent to 10 per cent of our stores in overseas markets,” he added.

Nath said CRG is setting its sights on expanding into Asean by taking its own brands into the market and merging and acquiring local restaurants.

“Of course, we are interested in penetrating new overseas markets with great potential, especially Vietnam where Central Group has its business interests. We are also interested in expanding into Malaysia as well as the CLMV countries,” he said.

In February this year, the company had a total of 990 restaurant outlets.

“By the end of this year, we will increase the number of outlets to between 1,060 and 1,070. Currently there are 13 restaurant brands in our portfolio. This year we are planning to add three to four new brands, bringing the total to 16-17 brands,” he said.

CRG also announced yesterday that it will roll out the “Transform from Operator to Innovator” strategy to drive exponential growth in food chain revenue and increase its market share in the Bt140-billion food chain segment.

The company this year will add two new restaurant chains to its portfolio. “Aroi Dee” will capitalise on the popularity of street food, offering dishes from Bt59 while “Suki House” will differentiate itself from the traditional suki restaurants in Thailand with plans to grow to 10 branches in the initial phase.

CRG is also looking to expand its footprint by expanding franchised restaurants in key new locations to attract more customers. It is also launching the “Multi-brand Delivery” service by developing its existing “1312” food delivery service into an omni-channel delivery platform with the introduction of a newly launched application for fully integrated services. The app will allow customers to order a meal, have it delivered or make a reservation at any of the leading CRG group restaurants with a single click.

CRG will also be unveiling the “Online Virtual Stores” to satisfy the needs of diners. The company will also introduce a new delivery format to shake the Hub Model market amid growth in on-demand deliveries.

In 2019, the company expects the restaurant industry in Thailand to grow no less than 3-5 per cent as a result of the rapid expansion of outlets by all restaurant chain operators and new restaurant openings by new operators, especially in the food chain segment that accounts for a third of the multi-billion-baht restaurant industry. All big food chain operators are adopting an aggressive investment strategy to grow their customer base in all segments.

Most importantly, CRG is looking to continually develop innovations to drive exponential growth by adopting the “Transform from Operator to Innovator” strategy to highlight that CRG is more than a franchise operator. It is also a committed innovator, utilising innovations to create new product lines as a way of boosting sales and expanding consumption opportunities, according to the strategy. 

The company is also developing new styles of restaurants to satisfy new-generation consumers’ lifestyle needs. These will include cafe-style small outlets and mobile units for greater mobility and easy access to new groups of customers in key high-potential locations.

CRG is also focusing its attention on developing and creating new brands of its own. At present, CRG boasts 11 brands in its portfolio, namely Mister Donut, KFC, Auntie Anne’s, Pepper Lunch, Chabuton, Cold Stone Creamery, The Terrace, Yoshinoya, Ootoya, Tenya and Katsuya. The company is also adjusting its food concepts to be more lifestyle-oriented, in order to create an exciting dining experience to attract diverse groups of customers. It will, meanwhile, maintain its strengths, including good quality, tastes, variety and excellent service.

CRG has plans to form new partnerships with operators of small-sized restaurants, new investors and new-generation entrepreneurs for co-investment opportunities.

Piyapong Chitchumnong, CRG’s senior vice president for marketing, said the company is looking to expand its multi-brand delivery service after the launch of the “1312: one order and enjoy the tasty food from multiple restaurants” delivery service. 

The new delivery service allows customers to order a meal, have it delivered from any restaurant in the company’s portfolio of 11 brands and pay for the delivery service in a single click.

Piyapong said the sales strategy is superior to that of its rivals in the domestic market. This year, the company is launching an omni-channel platform that makes it possible for customers to order food from any restaurant from CRG, or to make a reservation at any of these restaurants via an on-demand delivery app that is being launched next month.

 

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