July 2 (BusinessDesk) – Restaurant Brands New Zealand, which is counting on new burger chain Carl’s Jr to drive future earnings growth, is closing unprofitable stores at its worst-performing Starbucks unit ahead of a possible sale next year.
The fast-food operator closed six Starbucks stores last financial year and may shutter a further five outlets as leases come up for renewal, leaving 22 profitable cafes in the group, chairman Ted van Arkel said in an interview.
“We are tidying up, we are working at reducing the number of stores and when we are ready we will put it on the market,” van Arkel said. “In the meantime, we are getting some inquiries but there is nothing firm on the table.”
Restaurant Brands acquired the local franchise rights for 50 cafes from Seattle-based Starbucks in 1998. Since then, rival operators such as Esquires Coffee Houses, The Coffee Club and Gloria Jean’s Coffees have entered the market, boosting competition and denting Starbucks’ sales.
In the last financial year, Starbucks sales dropped 5.1 percent to $25.1 million as the chain was hit by store closures and price cuts. In Restaurant Brands’ other units, KFC sales increased 0.3 percent to $237 million, while Pizza Hut sales gained 5.3 percent to $47.9 million and Carl’s Jr added $1.9 million of new revenue to the group.