Retail Food Group Limited (ASX:RFG) intends to capitalise on the post-COVID economy following a return to its core retailing business.
RFG which owns Gloria Jeans, Michel’s Patisserie, Donut King, Crust Pizza, Pizza Capers, Brumby’s Bakery, Cafe2U and The Coffee Guy is focusing on its franchise partners rather than non-core operations such as commercial bakeries and dairy food operations.
The company believes that turning around of the sprawling retail business, which includes eight retails brands, around 700 domestic franchise partners and over 600 international licensed stores, is centred on supporting the business owners who operate the branded outlets.
"Refocused our business on our franchise partners"
RFG chairman Peter George said: “RFG’s core assets are its people, its products and its brands.
“The franchise partners are business owners, and if they are succeeding, RFG is succeeding.
“We have refocused our business on our franchise partners because successful brands in the retail food space must be continuously supported with strategic planning, training, management advice, HR support, product training, product innovation and creative marketing.”
He said over the past 18 months the company had initiated around 150 marketing and product campaigns to entice customers, which had driven at least $30 million in additional network sales.
Buoyed by sales
Despite the impact of COVID-19, in the last financial year (FY20) RFG increased underlying net profit after tax by 31.8% on FY19’s result.
In the first half of FY21 (July-December 2020), underlying net profit was up by 60% on the prior corresponding period, and same-store sales for the Brumby’s Bakery network were up 11.7%.
Its two pizza brands (Crust and Pizza Capers) have increased same-store sales by 6.7%.
Backed by COVID-19 package
George said RFG had resourced management teams that focused on supporting franchise partners and, multi-site owners, backed up by a COVID-19 package, where marketing levies were suspended for franchise partners, debt repayments were deferred and rental concessions negotiated.
He added: “Our all-important brand system General Managers were redeployed so they are now directly responsible for the needs of our franchise partners, and our new field service team structure was implemented in late 2020, providing specialist coaches who support franchise partners to improve revenue and profit outcomes.”
Improving conditions
George said normal trading conditions had not yet returned to Australian shopping centres but conditions were improving.
He said: “We have more to do but with our restructuring well underway, and with an influx of quality people into management, we are on a journey to ensure that RFG is not only Australia’s largest multi-brand retail food franchisor, but also the most successful for its franchise partners.”