NewsBite

Gold Coast food franchisor and Donut King owner Retail Food Group sees signs of trade returning to normal

Donut King franchisor Retail Food Group says there are signs customers are coming back to its stores following steep 50 per cent declines in late March and early April.

DONUT King franchisor Retail Food Group says there are signs customers are coming back to its stores following steep 50 per cent declines in late March and early April.

The Robina-based company, which in late March stood down or reduced the hours for a majority of its 500 staff, provided a market update this morning to investors.

It comes as the Australian Competition and Consumer Commission prepares to hand down the results of its investigation into RFG next month for possible breaches of Australian Consumer Law and the Franchising Code of Conduct relating to alleged mistreatment of franchisees.

RFG this morning said trading across its Australian network was gradually improving as Covid19 restrictions were eased.

Retail Food Group franchise brand Michel's Patisserie is starting to see customers return.
Retail Food Group franchise brand Michel's Patisserie is starting to see customers return.

MORE NEWS
Health retreat’s stunning transformation revealed

Secret talks over city council’s top job

75-year-old building firm calls in administrators

Executive chairman Peter George said customers were starting to return to shopping centres in greater numbers and there was “limited scope” for people to dine in.

“This trend was best evidenced by recent trading data for the Company’s Donut King, Gloria Jean’s and Michel’s Patisserie networks where customer count declines versus the previous corresponding period had approximately halved since a peak decline exceeding 50% during the reporting week ending 2 April 2020,” he said.

Mr George said 60 stores that had temporarily closed following COVID-19 restrictions had now reopened and he was “cautiously optimistic” trading conditions would continue to improve.

Thirty stores remain closed.

“Increasing traction has also been observed in terms of procuring rental relief for franchisees, with concessions having been obtained in respect of c. 290 outlets, predominantly in relation to April and May rental periods.

The ACCC will hand down its investigation into Retail Food Group for alleged breaches of Australian Consumer Law. Appearing before the joint parliamentary inquiry that ordered the investigation are former RFG CEO Tony Alford and Senior Executive Alicia Atkinson. Picture Gary Ramage
The ACCC will hand down its investigation into Retail Food Group for alleged breaches of Australian Consumer Law. Appearing before the joint parliamentary inquiry that ordered the investigation are former RFG CEO Tony Alford and Senior Executive Alicia Atkinson. Picture Gary Ramage

MORE NEWS

How banished Aussie bikers are sowing chaos in New Zealand

Court makes quick decision on Coast protest plans

'Impossible': Call to cancel Schoolies 2020

“In many other cases negotiations are advanced, and we anticipate that this process will be an ongoing one as the pandemic period persists and a reasonable recovery period is provided for.”

The company previously criticised landlords for not offering rental relief in an early April market update.

RFG said its international network remained impacted by Covid19 with 350 outlets still closed and 157 restricted to takeaway only.

However, 126 mobile coffee stores had resumed trading within the UK and New Zealand.

“It is anticipated that many of those outlets which have temporarily closed will start to reopen through June as local government restrictions ease, albeit c. 20 outlet closures are considered permanent.”

Brumby’s is another RFG brand. (AAP image, John Gass)
Brumby’s is another RFG brand. (AAP image, John Gass)

Mr George said the company’s strategy to reduce costs, including restructuring its wholesale coffee operation, would provide scope to offer more support to franchisees.

Shares were steady at 7.2 cents this morning.

Original URL: https://www.goldcoastbulletin.com.au/business/gold-coast-food-franchisor-and-donut-king-owner-retail-food-group-sees-signs-of-trade-returning-to-normal/news-story/313e8e89c592c404fb990432dbf45774