Restaurant Brands suffers severe sales drop in New Zealand
Quick-service operator Restaurant Brands said while the group was able to take rapid and appropriate action across its stable of brands the COVID-19 crisis has severely affected its operations over the past few months.
At the company’s 2020 AGM, chairman Jose Pares Gutierrez said that it will be important to monitor the economic impact moving forward after the markets it trades in were all adversely impacted.
However, Pares Gutierrez believes the company’s fundamentals are solid and the major impact of COVID-19 on its businesses will be short-term.
“Once the pandemic is under control, operations will gradually be re-established in all markets to move forward with plans in place,” Pares Gutierrez said.
Chief executive Russel Creedy said New Zealand was the hardest hit of its markets, due to the closure of its entire store network over a five-week period.
“These closures have cost us dearly in terms of total sales, with New Zealand sales down nearly $45 million since 25 March,” Creedy told investors.
“Fortunately the nature of our business and the strength of our brands means that our sales do bounce back strongly… However, the nature of our products means we never actually recover the lost sales because the consumption opportunity is not deferred but lost entirely.”
While all 148 New Zealand stores were shuttered for the five week lockdown period, Creedy added that the business had been able to retain all staff and have paid them full wages due to assistance from the government wage subsidy.
“We estimate that the impact of the virus has impacted New Zealand operations in excess of $15 million in lost EBITDA,” Creedy.
However, it is likely Restaurant Brands is unlikely to recover the cost of the lockdown period, Creedy said, and wouldn’t put forward a profit guidance due to the level of uncertainty still in the market.
“Whilst we are planning for a steady improvement and are certainly experiencing strong signs of a resurgence in our sales volumes, the sales and profit shortfall of the last few months, particularly in the New Zealand business, is not going to be fully recovered over the rest of this year.”
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