China QSR operator Country Style Cooking Restaurant Chain says same-store sales slumped 7.3 per cent in the first quarter of this year.
The company, which is on track to open 60 new restaurants this year, reported first quarter revenues of RMB353.5 million ($57 million), an increase of 1.9 per cent on the same quarter in 2014. The company had 245 restaurants trading in both quarters, but as at the end of March had 344 trading, in 29 Chinese cities, 77 under the Mr Rice brand.
Its restaurants operating margin was 12.9 per cent, a decrease of 170 basis points from the same quarter of 2014.
Net income for the quarter was RMB8.3 million ($1.3 million), compared to RMB11.6 million in the same quarter of 2014.
Xingqiang Zhang, CEO, said the company was pleased with continued revenue growth and network expansion in the first quarter.
“During the quarter, we focused on further improving food safety and nutrition by using high-quality raw materials like non-GMO oil, sea salt and cage-free chickens to our product offerings. We believe these efforts to improve food quality is in line with the evolving dining habits of our customers, can better differentiate CCSC from its competitors and may lead to higher per-order spending over time,” he said.
“We are also working on modifying our image and the dining environment in our restaurants to reinforce customer perception of CCSC restaurants as an ideal location for young people and families who appreciate an unique customer experience and a place for socialising.”
The company said increasing competition had led to the reduction in sales, along with an increase in food and packaging costs and wages.
CCSC expects second quarter revenues of between RMB 360-380 million ($58.1-$61.3 million), representing a year-over-year growth of between approximately 4.4 per cent and 10.1 per cent.
