Downturn supplies lift to Fairwood
After incurring losses for the past four years, fast-food operator Fairwood Holdings has reported single-digit year-on-year growth in turnover in the first quarter to June 30, according to managing director Dennis Lo Hoi-yeung.
He said while average expenditure per person declined about 10 per cent from last year, more consumers were seeking cheaper meals amid the economic downturn.
Fairwood plans to open six new outlets in Hong Kong this year.
The company hopes to cut rental expenditure by $12 million this year, of which $5 million to $6 million has already been achieved following 10 to 30 per cent reductions at various outlets, Mr Lo said.
Tenancies at another 17 outlets will be due for renewal this year.
A rescheduling of front-line staff work shifts has boosted productivity 11 per cent, reducing part-time and overtime labour costs.
This should bring annual savings of $4 million to $5 million, he said.
The company would focus on improving quality rather than promoting new products this year, Mr Lo said.
'To launch a new product, you will have to spend $2 million to $3 million on advertising. We would rather spend the money on improving quality and value for customers.' Continuing last year's retrenchment, Fairwood plans to close four or five mainland outlets of its 17, but Mr Lo ruled out a complete exit from the market.
The company also sees further growth in institutional catering and is negotiating catering contracts with various universities, hospitals and factories.