Locally listed Cafe de Coral, the world's largest Chinese fast-food chain, is to resume its expansion plan in the mainland after learning lessons from its poor performance in the past eight years.
According to a SG Securities research report branding Cafe de Coral as a defensive play, the group plans to open three fast-food shops in Guangdong province in the next 12 months, costing about HK$10 million.
Since 1992, when it first opened in Shenzhen and Foshan, Cafe de Coral has had to shut a number of non-performing stores in the mainland, and only became profitable last year.
'After more than seven years of operation in China, management believes that Cafe de Coral has now accumulated sufficient knowledge of the market,' the report said of the group's revived expansion plan across the border.
There are now six stores in Guangdong.
Cafe de Coral is expected to spend HK$2 million to HK$3 million setting up each new store, which is significantly lower than HK$6 million in the past few years. It also plans to price its meals cheaper, at HK$20 per billing.
