Malaysian cafe chain OldTown Coffee has reported falling sales and profits as Malaysians continue to get used to life after the imposition of GST on April 1.

The company, which operates 210 discount coffee shops and sells packaged coffee through FMCG channels, posted a profit of RM9.49 million ($US2.2 million)  in its first quarter, to June 30, 6.8 per cent less quarter on quarter and an unhealthy 18.9 per cent less year on year. Topline sales slumped 10.5 per cent quarter on quarter and 3.9 per cent year on year to RM94.06 million (US$22.3 million).

OldTown concentrates on the local Malaysian market serving milky coffees and light snacks – it does not make espresso-style coffee drinks like Starbucks.

The company says its declining fortunes were driven by a downturn in cafe sales, rather than packaged goods: Same store coffee shop profit fell 46.4 per cent year on year.

The company plans to open 10 new outlets before the end of the current financial year, next March, representing an expansion of about five per cent.

Sales of packaged foods – mainly instant coffee and coffee mixes – rose 29 per cent.