Fashion
Fast growing Chinese QSR operator Country Style Cooking Restaurant Chain has reported a decline in same-store sales as it focuses on quality rather than price.
Total revenue in 2014 rose 7.5 per cent to RMB1.46 billion ($235.7 million), but comparable sales slid 5.3 per cent. The company’s restaurant network grew from 293 outlets to 337 year-on-year, but the same store comparison included 228.
“The QSR (quick service restaurant) industry in China remains highly competitive and we continue to evaluate opportunities to further improve performance and customer loyalty,” said Xingqiang Zhang, Country Style Cooking CEO.
“Instead of engaging in intense price wars, we have been focusing on training our cooks and staff, developing new dishes and combo meals, refining our online ordering experience and renovating some of our older stores, upgrading visual identification and interior decoration to improve brand recognition, customers’ dining experience and overall customer satisfaction.
“We believe this commitment to invest in our future will differentiate us from our competitors and reinforce our leadership in China’s QSR industry, resulting in higher levels of long-term revenue and profit growth.”
Country Style Cooking said its restaurant operating margin was 13.8 per cent in 2014, down 130 basis points from 2013. Income from operations decreased by 33.3 per cent to RMB22.6 million ($3.6 million). Net income in 2014 was RMB38.0 million ($6.1 million), compared to RMB39.6 million in 2013.
Fourth quarter revenues rose 7.4%, while comparable restaurant sales decreased by 7.7 per cent, (with 252 restaurants in the comparison). It lost RMB700,000 ($100,000), compared to income from operations of RMB1.7 million in the same quarter of 2013.
Xingqiang Zhang said the company met both its fourth quarter and full year 2014 financial forecast.
“Our fourth quarter financial performance showed modest top line growth, primarily supported by our expanding restaurant network. As previously announced, during the fourth quarter of 2014, we signed a strategic cooperation agreement with an e-commerce company, Yimutian, to build a more efficient procurement model. We are firm believers in utilising the technology and leveraging the strengths of our business partners to enhance our operations.”
