Will China’s sluggish shopper traffic sink BreadTalk in FY17?

It’s shuttered five food atriums in FY16.

There’s life after death for BreadTalk Group (BreadTalk), as the chain’s rationalisation of food atriums is keeping it afloat amid the increasingly sluggish shopper traffic in China.

According to a report by RHB, BreadTalk shuttered five food atriums in 1Q16, and there could be more closures in FY16. RHB asserts that this could lead to more write-offs.

With the closure of non-performing stores, the profitability of BreadTalk’s food atrium division should recover in FY17.

Moreover, BreadTalk’s bakery division is doubling down on its supply chain efficiencies to retain its bottomline amidst a slower expansion pace.

“We understand that the group is in the midst of developing a digital system to reduce wastage and BreadTalk has since seen a 1ppt YoY improvement in EBITDA margin in 1Q16,” RHB notes.

“While weakness in same store sales is likely to persist, we think the improvement in operational efficiencies will help to sustain this division’s operating profit, in absolute figure terms. BreadTalk is also working on product innovation to keep its brand fresh and improve gross margins,” it adds.

Photo: BreadTalk Singapore Facebook

Get QSRMedia Asia in your inbox
Since you're here...

...there are many ways you can work with us to advertise your company and connect to your customers. Our team can help you dight and create an advertising campaign, in print and digital, on this website and in print magazine.

We can also organize a real life or digital event for you and find thought leader speakers as well as industry leaders, who could be your potential partners, to join the event. We also run some awards programmes which give you an opportunity to be recognized for your achievements during the year and you can join this as a participant or a sponsor.

Let us help you drive your business forward with a good partnership!

The country’s health ministry said the government will review the measures in two weeks.
The upcoming opening will also be the brand’s Southeast Asian debut.
The commemorative store is located on Des Voeux Road in Central.
A portion of the profits from this collection will support healthcare workers who are impacted by COVID-19 through the Thai Red Cross Society.
The fast food conglomerate partnered with DoubleDragon Properties Corporation.
Deliveroo customers will be the first to avail of the item
Restaurants' sales were up 89.5%.
The group said take-out sales and government subsidies helped.
Delivery Hero has been trying to sell Yogiyo in order to acquire Woowa Brothers.
The outlet features a 168-seater space with 9 food stalls. 
There are currently 16 Shacks open in the market.