Turnover dips as Ajisen (China) under pressure
While half-year turnover edged down 2.5 per cent for restaurant group Ajisen (China) Holdings, its core profit grew 36 per cent.
Its turnover was RMB1.1 billion (US$165.2 million) while the profit reached RMB135 million.
Gross profit margin, up 2.3 points, was 73.1 per cent, while the gross profit reached about RMB841 million, up 0.7 per cent. Profit attributable to the owners of the company fell by about 80.9 per cent to RMB108 million.
Ajisen says competition in the foodservice industry has intensified, with high opening and closing rates emerging as the new norm. As an example, it cites a surge of new restaurants in Beijing, Shanghai, Guangzhou and Shenzhen being accompanied by a higher rate of take-over with a monthly closure rate of 10 per cent, and a compound annual closure rate exceeding 100 per cent.
Also the shopping centre/catering model is under pressure, says the company, as a result of lower flow aggregation and insufficient customer numbers because of the homogenisation of shopping centres. Catering outlets in shopping malls in 10 cities recorded a closure rate of more than 30 per cent.
Meanwhile, the takeaways segment of the industry is growing rapidly with an accent on healthy eating. Statistics for last year show that overall transactions in the segment sharply increased to more than RMB150 billion in value, accounting for 4 per cent of the catering industry total.
Ajisen says its management will actively explore and seek opportunities to transform, adopting a lean management approach and establishing smart stores to enhance the customer experience.
At the end of June the group had 649 fast-casual chain restaurants, down 13 from the same time last year. However, its network extended its reach to 31 provinces and municipalities in China, amounting to 133 cities, 11 more than last year.
Four major production bases were launched – in Shanghai, Chengdu, Tianjin and Dongguan – to support the group’s expansion.
As well as China, the group has 29 restaurants in Hong Kong, down eight from last year, and one in Rome, Italy.