Kiwis' fast food KFC habits boost Restaurant Brands profits

Tuesday, 16 April 2019

Kiwis' spent $336 million on KFC last year, up $17m, which has one nutritionist calling for people to learn to cook healthy meals for themselves.

KFC is owned by Restaurant Brands, which also owns the rights to Pizza Hut, Carl's Jr, Taco Bell and Pizza Hut in New Zealand, Australia, Hawaii and Guam.

KFC accounts for nearly half of Restaurant Brand's total New Zealand sales of $795m, and more stores are planned.

Restaurant Brands chief executive Russel Creedy says the company will open five new KFCs in New Zealand, two new Pizza Huts, and two Taco Bells this year.

Healthy Food Guide nutritionist Claire Turnbull said fast food restaurants were popular because people perceived them as cheaper and more convenient.

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Healthy Food Guide nutritionist Claire Turnbull says people can change eating habits by looking for economical and easy options.

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'People sometimes wait a long time in their cars at fast food outlets for the amount of time it would take to make a tasty omelette. But the key to encouraging home cooking is to make food accessible and economical.

'Eating is habitual so to change habits you have to make it easy, and make people confident about doing it,' Turnbull said.

Finger lickin' good is proving lucrative for Restaurant Brands.

It was partly about education and getting children in schools into food preparation habits, and equally about access to healthy, economical and easily prepared foods from supermarkets, she said.

There were many easily obtainable healthy cooking guides especially on the internet for people who were unfamiliar with food preparation.

'Bulk cooking and freezing meals is one way to make it economical and plan ahead. Using pulses like lentils and vegetables to go with them is very cheap. A bowl of porridge costs about 10 cents,' Turnbull said.

'There are problems when people eat salt and high fat diets because their tastes become accustomed and it can feed a cycle of behaviour that has long term consequences.'

Turnbull said when people were busy working long hours it was tempting to buy prepared foods.

Restaurant Brands chief executive Russel Creedy said KFC sales were likely to accelerate as Restaurant Brands rolled out 30 more KFC stores and 60 new Taco Bell stores in New Zealand and Australia over the next five years.

Restaurant Brands owns some stores and operates others on a franchise basis. Overall the chain employs about 8000 people.

While the profit from KFC buoyed Restaurant Brands, its overall profit was only slightly ahead of last year due to lower margins from Pizza Hut and lower sales and profits from Carl's Jr.

All the company's $35m after-tax profit for the year ended February 2019 will be retained instead of paid as a dividend, to help with expansion plans.

This would include five new KFCs in New Zealand this year, two new Pizza Huts, and a Taco Bell, with smaller numbers of new stores in Australia, and potentially in the United States.

They will add to the total 283 fast food stores owned by Restaurant Brands, including 142 in New Zealand, 80 in Hawaii and 61 in Australia.

There are 101 KFCs in New Zealand, six of them under franchise arrangements paying royalties, and 98 Pizza Huts with 30 directly owned.

The company has undergone a recent change in ownership so future profits from the NZX-listed company will go to Mexican investor Finaccess Capital which has taken control after buying three quarters of the shares.

Three Kiwi directors have resigned and Jose Pares and Emilio Fullaondo have been appointed, with further changes expected at the annual meeting. Pares previously worked for a beer company that brought Corona to New Zealand.

During the year the company sold the Starbucks cafe chain for $4.4m providing a $2.1m profit.