New subway shifts Pizza Hut off menu
THE Guangzhou municipal government has ordered a 10-month-old Pizza Hut to close to make way for construction of the new subway system.
A spokesman for Pizza Hut, Y K Pang, yesterday said he was disappointed at the abrupt removal notice.
The sudden shutdown order would cost the company two million yuan (about HK$1.84 million), according to Mr Pang, the regional director of Jardine Pacific, a Jardine Matheson subsidiary.
'Although located in Guangzhou, the cost of rent equals Causeway Bay's and Central's prime shopping centres,' Mr Pang said.
The restaurant was being moved to an office building in Renminzhong Lu, two blocks away from the old site at Beijing Lu, he said.
Mr Pang said the new 4,000 sq ft restaurant, would be 15 per cent smaller than the original, even though the rent remained the same.
The only compensation made by the Urban Planning Department of the Guangzhou municipal government was an exemption of half a year's rent.
Renovation of the new restaurant took 21/2 months and the new Pizza Hut reopened in March.
The shutdown of the Pizza Hut proved that business investments in China were not lucrative, as Jardine Pacific realised, Mr Pang said.
Changes in city planning could be unpredictably fast and sometimes inconsistent, Mr Pang said.
The move has brought into question the Chinese Government's respect for business contracts.
Twenty-five new Pizza Hut restaurants will be opened in the next five years despite the company's setback.
More employees would be needed, Mr Pang said, as the subway system was expected to be completed by 1998.
Late last year Beijing authorities kicked McDonald's out of its flagship restaurant in the capital's top shopping district to make way for a shopping complex.