Betty’s Burgers sales, earnings jump amid strong demand

Betty’s Burgers has grown quickly to become a major player in the burger flipping sector and drive sales for its owner Retail Zoo, which also owns Boost Juice.

Bettys Burgers staff Phoebe Cooney, Jamie O'Brien and Julia Johnson take a break at the go to burger bar on Hastings Street in Noosa. Picture: Lachie Millard

Retail Zoo chief executive Nishad Alani said the spending spree unleashed since lockdowns ended helped his company’s Boost Juice smoothie bar in Melbourne’s Chadstone shopping centre ring up more sales on its first night of trade from 6pm to midnight than for all of a typical Saturday.

Meanwhile Retail Zoo’s other growth engine, the hip beachy style burger chain Betty’s Burgers, had everything thrown at it during Covid-19 lockdowns including the Melbourne earthquake that partially destroyed one of its stores but managed to pivot to online orders and takeaways to sustain its profitability.

It comes as Retail Zoo, the Bain Capital controlled company that also owns Cibo Espresso and Salsas, managed to ramp up its sales and profitability significantly over 2021 despite all the disruptions and lockdowns caused by Covid-19.

Mr Alani said the company’s sales, particularly across its leading chains Boost Juice and Betty’s Burgers, accelerated in the last quarter of 2021 and continued to gather pace since September as lockdowns came to an end across its key markets of New South Wales and Victoria.

“We have strong profits, strong revenues and now there is a lot more certainty with respect to the future with respect to Covid and lockdowns and that is where we thrive,” Mr Alani said on Tuesday.

“We have just had an incredible last two weeks, it has just been fantastic, we had one of our best days on Saturday ever for the company in terms of sales and revenue and we are looking to open five more (Betty’s) stores before Christmas and I don’t think a lot of companies could pull that off.

“Life is good. When people aren’t in lockdown they want to enjoy and Betty’s provides that and so does Boost Juice, people are hitting the shopping centres and our Boost Juices are predominantly in shopping centres. Chadstone opened at 6pm on Friday and we did more sales between 6pm and midnight than we normally do on a Saturday and Saturday is our biggest day.”

Through the pandemic consumers switched to takeaway, delivery orders and buying burgers from their smartphone apps during lockdowns while Covid-19 didn‘t put the brakes on expansion as six Betty’s Burgers restaurants and 21 Boost Juice stores were opened last financial year.

Retail Zoo managed to ratchet up its profit fourfold last year in what was a challenging environment for all retailers, especially hospitality, hitting profit of $14.14m for 2021 against a profit of $3.87m in 2020 according to its latest accounts lodged with ASIC.

Also helping to preserve and grow earnings during the pandemic was Retail Zoo’s decision in March to refinance its existing loan facility of $160.7m, negotiate rent relief for company owned and franchise stores, ongoing JobKeeper support and using up remaining waivers from its lenders in relation to interest and debt payments as well as testing of financial covenants that were negotiated in 2020. According to its 2021 accounts Retail Zoo benefited from JobKeeper by $5.5m up from $3.5m in 2020.

Betty’s Burgers is now outshining Boost Juice and Mr Alani believes the chain is popular enough in a competitive burger market to ramp up its expansion from the current 39 stores to roll out between 12 to 15 stores a year.

The latest 2021 accounts for Retail Zoo reveal that Betty’s Burgers now generates just under 60 per cent of all group sales for the parent company, which in 2021 hit $141.34m, while Boost Juice – the juice shop founded by Janine Allis and once the growth engine for the group – now only delivers one-third of sales. Although Boost Juice still remains highly profitable, posting EBITDA of $32m on sales of just over $48m in 2021.

Betty’s Burgers only opened its first store in Noosa in 2014 but the fast-food chain has quickly raced ahead to become a highly profitable player in the nation’s $8 billion burger sector with sales topping $83.15 million in 2021 up from $68.93m in 2020, according to recent accounts lodged with ASIC.

Over the last year and despite Covid-19 lockdowns shutting down many of its restaurants, Betty’s Burgers almost doubled its pre-tax earnings to $15.62m.

It comes as the burger flipping market becomes increasingly competitive and saturated with new players entering to take market share from established chains like McDonald’s and Hungry Jack’s such as Carl’s Jr and Hollywood actor Mark Wahlberg’s Wahlburgers which plans to open as many as 20 stores with its first to be at Sydney Harbour.

After Covid-19 hit in March Retail Zoo experienced 12 consecutive months where monthly sales were lower than the same month in the prior year, and in the month of April 2020 compared to the corresponding month of April 2019 revenue sank by 65 per cent.

However, the popularity of online orders, especially via mobile phone apps, helped Retail Zoo to resurrect sales in the final quarter of 2021 to deliver a strong rebound in the last few months of the financial year.

Its continued growth through the worst of the pandemic could embolden Bain Capital to revisit its plans to float Retail Zoo and its more than 650 outlets under the Boost Juice, Betty’s Burgers, Cibo Espresso and Salsas chains on the ASX after it pulled the float in 2019 that at the time valued the fast-food business at around $400m.

“Regarding the float that is really in the hands of the shareholders and I can‘t read tea leaves and shareholders have to make that decision, market conditions have to be ideal and so that is really not in my control,” Mr Alani said.

According to the latest Retail Zoo accounts no shareholder dividend was paid in either 2020 or 2021. Retail Zoo shareholders include private equity firm Bain which bought its stake in 2014 for $185m and founders Ms Allis and husband Jeff.

Originally published as Betty’s Burgers sales, earnings jump amid strong demand