Free Subscription

  • Access 15 free news articles each month


Try one month for $7.95
  • Unlimited access to news,insights and opinions
  • Quarterly and weekly magazines
  • Independent research reports and forecasts
  • Quarterly webinars with industry experts
  • Q&A with retail leaders
  • Career advice
  • 10% discount on events

Cafe de Coral sales surge in core Hong Kong market

Network expansion and brand portfolio enhancement helped boost restaurant/catering group Cafe de Coral sales by 4.3 per cent to HK$7.895 billion (US$1.01 billion) for its latest fiscal year.

In its core Hong Kong market, sales rose 7.3 per cent to $6.9166 billion, while Mainland China sales fell 12.5 per cent to $978.7 million.

While the company’s profit from Hong Kong operations decreased 6.2 per cent to $808.8 million (from $862.1 million) due to the increase in manpower expense, returns soared 147.5 per cent in Mainland China to $131.3 million (compared to $53.1 million), mainly due to strong same-store sales growth and an improved operating.

Adjusted net profit totalled $503.8 million, 2.7 per cent lower than the preceding financial year or an improvement of 1.9 per cent if certain non-operating and non-recurring items were excluded.

Heavy competition

In the face of heavy competition in Mainland China, the group brought in a team of local managers, rejuvenated its signature products, revamped menus and ran a series of promotions.

New business models were also developed, including e-commerce and O2O deliveries.

At the end of the year, there were 99 outlets on the mainland compared with 114 last year.

In the casual dining sector, however, the group increased market penetration with its stronger brand portfolio. During the year, the group adopted a multi-faceted strategy to strengthen its workforce and stepped up investments in brand and network expansion – critical for supporting long-term business growth despite their short-term impact on profit growth, the group says.

“In particular, we stepped up investment in our workforce to meet the challenge of the severe labour shortage in the F&B industry.”

Ten Cafe de Coral fast-food outlets were opened during the year, taking the total to 166 as at the end of March, compared with 157 stores a year earlier. There are plans to open 12 more cafes in the coming months.

Super Super Congee & Noodles recorded softer same-store sales growth of 1 per cent. Twelve stores opened during the year, taking the total to 50, compared with 40 outlets 12 months earlier. Four outlets are scheduled to open in the coming months with a new store design.

Stronger portfolio

Cafe de Coral renovated brands, consolidated old brands and fine-tuned new ones by extending their positions in regional shopping malls. Outlets were reduced from 69 to 64 at year’s end.

“Our two main home-grown casual-dining brands Shanghai Lao Lao and Mixian Sense had outstanding performance,” says the group.

Shanghai Lao Lao had 10 outlets at March 31, with four more to be added soon. Mixian Sense achieved double-digit growth during the year thanks to menu and product innovation, and 11 stores will be opened in the next few months.

With a brand revamp and integrated menus, Oliver’s Super Sandwiches and The Spaghetti House had 19 and 12 shops respectively at the end of the year, compared with 21 and 17 a year earlier. Franchised brands Don Don Tei and The Cup also had menu revamps.

Catering remained strong, including school caterer Luncheon Star. Asia Pacific Catering retained most of its strategic contracts and secured new clients, ending the year with 79 units compared with 83 in the previous year.

Chairman Sunny Lo Hoi Kwong says the company completed its succession plan during the year, laying the groundwork for a new generation of talent.

“Our new management team, with Peter Lo Tak Shing taking over a CEO, has not only aligned our company with the five-year business plan and founders’ philosophy, but is also exploring opportunities and addressing challenges.”

The chairman also paid tribute to his father Victor Lo Tang-seong, who died on June 30 last year at the age of 101 years. “He was an inspiration to me and the company, and set in place the values we continue to live by today.”

You have 7 free articles.