Chicken franchise eatery slashes growth target to 4-5%
KFC operator looks to the future and the expansion of its franchise despite the sluggish economy and competition from new players
A sluggish economy and the shrinking purchasing power of consumers have forced QSR & Western Cuisine, operator of the KFC fast food franchise under Central Restaurant Group (CRG) to adjust its estimates on business growth.
Sales of KFC at existing stores this year are now expected to grow 4-5%, versus previous estimates of 5-6% announced earlier this year, Piyapong Chitchumnong, senior vice president of QSR & Western Cuisine, said on Tuesday.
“We also expect the average purchase of KFC to be at 200 baht per bill this year, with no growth from previous estimates,” he said.
Piyapong said CRG has adjusted down the growth target of KFC for 2024 to 7-8%, compared to the 11% target announced at the start of the year.
KFC recorded sales of 7.05 billion baht in 2023.
“Besides lowered purchasing power, the restaurant business is also facing high competition from new players that offer alternative choices to consumers,” said Piyapong. “This industry has no barriers to entry. Anyone can jump in with just cooking utensils and recipes. We are seeing a lot of new players this year chipping away at our market share.”
He added that as the first franchisee of the KFC brand in Thailand 40 years ago, CRG is hoping to maintain healthy growth for KFC restaurants in the next 3-5 years with constant branch expansion and steadily increasing sales and profits.
Piyapong said the company plans to open 23 new branches this year, adding to the existing 338 branches countrywide (as of May 31). Among these new branches will be the new model of restaurant called ‘grab and go’, which occupies a smaller space of 50-60 square metres. and targets mostly to-go customers at BTS and MRT stations.
“This new model will use 20% lower investment, which is typically at around 10-15 million baht per branch,” he said. “Moreover, we plan to open 35 more KFC kiosks this year, from the current 14 kiosks available.”
Piyapong added that CRG has remodelled Thailand’s first KFC restaurant, which opened at Central Ladprao in 1984. Based on the “Colonel's Legacy” concept, the project brings back the retro style and assimilates with modern technology in food ordering for the highest convenience, he said.
CRG operates 1,618 branches of franchise restaurants in Thailand, an increasing from last year’s 1,599 outlets. Total sales in Q1 amounted to 3.14 billion baht, growing 4% year on year with a profit of 124 million baht, an increase of 6% year on year.
