QSR Brands looks to expansion of KFC and Pizza Hut outlets following IPO

QSR Brands has revealed expansion plans for its KFC and Pizza Hut brands following its upcoming IPO. According to a draft prospectus submitted to the Securities Commission, the company also aims to bolster its marketing initiatives to build its market position for both fast food brands.

The company’s IPO consists of an institutional offering and the retail offering, totalling up to 1,465,926,000 IPO shares, representing 35.0% of its enlarged issued share capital.

With the proceeds, QSR has plans to open and/or relocate 35 KFC outlets by end of 2019 with cost ranging from RM1.1 million to RM2.2 million per outlet to strengthen market position. The expansion plans will stretch throughout Malaysia, including under penetrated cities and towns or other areas with potential for network expansion.

The group plans to expand existing marketing initiatives to better engage with and promote products to consumers, maintain brand relevance and increase brand appeal. We will continue our promotional campaigns, through which we offer a rotating selection of our existing products at reduced prices, to increase traffic to our outlets.

The prospectus added that marketing efforts aim to target specific consumer groups and geographies. The company will also keep up-to-date with technological developments in marketing and advertising on online and social media platforms. There are also plans to develop product offerings and outlets to attract customers across the various demographic groups.

“In particular, we intend to focus on providing attractive dining options for families so as to grow our market share in this customer demographic group, which tends to have a higher average spending value per transaction,” the prospectus added.

For Pizza Hut, QSR intends to relocate or open 30 Pizza Hut outlets by 2019 with cost ranging from RM0.9 million to RM1.7 million per outlet to strengthen market position. It intends to focus on driving Pizza Hut's brand relevance among consumers through strategic promotional activities. This will see the increasing of digital and e-commerce initiatives, and introducing new and innovative products into the markets which QSR operates in.

The group will also continue bundling various products into value-for-money bundled offerings, and offering limited-time-offer products during festive periods such as Chinese New Year, Hari Raya and the New Year holiday period.

Overall, QSR is also looking to enhance its technology and digital capabilities to improve customer reach and drive growth, enhance customer experience, streamline outlet operations, and enhance operating efficiency and e-commerce and delivery capabilities.

“We continually invest in digital technology to streamline our outlet operations and improve our operating efficiency, profitability and competitiveness. We intend to focus on developing our digital platforms and e-commerce capabilities to improve our customer experience and drive growth,” the statement added.