BreadTalk Group sees growth in Thailand and greater Mekong-region

BreadTalk Group’s revenue has increased by 6.1% to SG$157.6 million in the first quarter of 2019, contributed by revenue increases across its four business divisions – bakery (+2.3%), food atrium (+3.1%), restaurant (+9.8%) and 4orth (+49%). This comes as BreadTalk Group positions itself for growth in Thailand and greater Mekong-region markets with the setup of its third regional office in Bangkok.

Glenn Huang, group corporate affairs & communications vice president, said in a statement to Marketing, “BreadTalk Group will leverage on the positive momentum and continue to chart our growth using innovative marketing techniques and advertising platforms to reach out to our customers globally.”

Overall, the group’s Q1 2019 core profit also increased by 11.5% year-on-year to SG$1.3 million. In a press release, the company attributed the growth to its “continual focus on improving the quality of products and overall efficiencies in the central kitchen and procurement efforts”. For instance, the company has embarked on efforts to increase its central kitchen production facilities in Thailand and China.

Group CEO Henry Chu said 2018 was a year of milestones for the company with Din Tai Fung’s expansion into London and the entrance of joint-venture partners Wu Pao Chun Food and Song Fa into strategic markets such as Singapore and China respectively.  The partnership also saw the opening of the sixth Song Fa outlet, which was the first in Thailand. According to the press release, BreadTalk Group will be ramping up its expansion of the Song Fa Bak Kut Teh brand under its 4orth food concept division with opening of more outlets in Thailand, Shanghai, Beijing, Shenzhen, and Guangzhou.

Financial numbers for the restaurant division, notably, showed “underlying strength” of the Din Tai Fung brand amongst consumers, said the company. Same store sale growth for the Singapore operations recorded a high single digit percentage. While the group expect to remain focused on new outlets pipeline in Singapore and Thailand, it will also explore other territories to enter or expand in. Plans are underway to deliver the second Din Tai Fung restaurant in London.

Operations in Thailand has also helped the group recover from an otherwise 5.3% year-on-year revenue loss, if not for the acquisition of the 50% interest in BTM (Thailand) from Minor Food Group. The consolidation of the Thailand business added 47 BreadTalk outlets to its direct operated store count. Excluding them, the group would be affected by the lower revenue from the direct operated stores in Beijing and the franchise business in China, despite being partly offset by stronger revenue by the direct operated stores in Singapore.

In the BreadTalk Group’s outlook for the year, the company said it is off to a great start by successfully divesting the “loss-making” Carl’s Jr business in China, consolidating its shareholding in its profitable Food Republic business in Guangzhou, and bringing bakery business in Thailand back into the fold of the Group.

With close to 1,000 retail stores spread across 16 countries, BreadTalk Group’s brand portfolio comprises direct owned brands such as BreadTalk, Toast Box, Food Republic, Bread Society, Thye Moh Chan, The Icing Room and
partner brands such as Din Tai Fung, Nayuki, TaiGai, Sō Ramen, Song Fa Bak Kut Teh and Wu Pao Chun Bakery.

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