14 Dec 2011

Restaurant Brands adds another fast food chain

7:35 pm on 14 December 2011

Restaurant Brands has added another fast food chain to its stable, gaining the right to run the Carl's Junior burger stores in New Zealand from next year.

Carl's Junior, which is owned by CKE Restaurants in the United States, is pitched as a premium burger restaurant with a made-to-order menu and partial table service, all-you-can drink beverage bars and a strong breakfast offering.

There are already two Carl's Junior restaurants in Auckland, operated by former All Black Michael Jones who has the rights to develop a limited number of the stores in the city.

Restaurant Brands already operates the KFC, Pizza Hut and Starbucks Coffee chains. It says it will work closely with the existing franchisee.

Forsyth Barr retail analyst Guy Hallwright says the company is well-positioned to make the investment.

He says the investment is going to depend on how much it costs to kit out one of the stores and how many are going to be opened by the existing franchisee, but it could be in the order of $10 to $15 million.

Radio New Zealand's business editor says this now throws into question Restaurant Brands' commitment to Taco Bell, which it previously flagged as a possible fourth fast food chain.

It had planned to pilot a Taco Bell store in Auckland this year, but then delayed that, saying it would wait until retail conditions picked up.

Separately, Restaurant Brands is still grappling with declining sales, which fell 3% to $72 million in the 12 weeks to 5 December, compared with the same period last year.

It blames the fall on store closures in Christchurch following the earthquakes and the sale and closure of 14 Pizza Hut stores.

Sales at stores open at least a year fell 0.9%, with KFC and Pizza Hut both falling 1.6%, offsetting a jump of 6.8% at its Starbucks stores.

Afterwards Restaurant Brands shares fell 1 cent to $2.08 each.