With the domestic food industry expected to start growing again in 2022, Central Restaurants Group (CRG), the operator of KFC, Mister Donut and Ootoya restaurant, has raised its investment budget by 70% year-on-year to expand its businesses.
According to Nath Vongphanich, the company's president, the group's 2022 strategy will focus on four pillars: expansion of restaurants and development of necessary ecosystems to accommodate growth; creation of new restaurant models and a revamp of existing restaurants; revving up delivery services and expansion of cloud kitchen facilities; and forming new partnerships via mergers & acquisitions (M&As) and joint ventures.
In 2022, CRG plans to allocate 700 million baht to expand its businesses, more than 70% higher than last year's investment. Of the total, 600 million baht will be used to open over 200 new food points of sale at shopping malls, hypermarkets, commercial areas and shophouses. The remaining 100 million baht is slated to renovate its 1,000 existing restaurants to meet the new normal lifestyle, with the size scaled down by 30%.
It also plans to increase the number of its cloud kitchens to 20 stores this year, up from 11 stores last year. This will help drive growth of its delivery business sales by 15% to 3.5 billion baht.
According to Mr Nath, this investment budget excludes another 500 million baht to be allocated for one or two M&A deals this year. In addition, the group plans to develop and revamp its restaurants' technology infrastructure in response to the challenges of the new normal.
Mr Nath said that these active business plans, aiming to catch up with rising consumer demand and confidence, have provided brighter prospects for a restaurant industry that is showing signs of recovery, partly due to the state's successful Covid-19 vaccination scheme.
"The full-service restaurant industry is on the path to recovery because of investments by large food service operators that have been delayed since 2020 and companies' drive to expand their food and restaurant portfolio to cover more food categories,'' Mr Nath said, adding that the Public Health Ministry's plan to classify Covid-19 as an endemic disease will also be positive for the restaurant industry.
According to Mr Nath, the restaurant industry, currently worth in the region of 330-340 billion baht, is showing signs of recovery and is expected to rebound to a growth of 10% this year and hit nearly 400 billion baht following a contraction of 10% in 2021.
"However, the market remains full of many challenges such as fiercer competition from emerging brands and higher operating costs," Mr Nath said. "Over the past two years, restaurant operators have suffered considerable economic pain caused by the pandemic. But we have been able to learn to adjust and continually develop flexibility of our business operations. We are confident that our business operations are stronger than ever."
With the new plans, the firm aims to grow its sales by 30% to 12.1 billion baht this year, from 9.37 billion baht in 2021.
In 2021, CRG operated 17 restaurant brands in Thailand including Mister Donut, KFC, Auntie Anne's, Pepper Lunch, Chabuton Ramen, Yoshinoya, Ootoya, Katsuya and Salad Factory, with a total of 1,380 outlets nationwide.
