CRG banks on new stores, delivery for 12% growth

Mr Nath, left, and Piyapong Chitchumnong, senior vicepresident of marketing, promote CRG’s new online delivery app.

Central Restaurants Group Co (CRG) plans to spend 2 billion baht to add new stores, launch a delivery app and add four new brands, aiming for sales growth of 12% to 13.4 billion baht.

President Nath Vongpanich said 600 million baht of the total is for marketing, up from 500 million last year.

Another 1.4 billion baht, up from 800 million in 2018, is for expansion, including 730 million to open 120-130 new stores, 250 million to renovate existing ones and 730 million for IT.

“The new stores will be both domestic and foreign,” he said. “We are looking at Cambodia, Laos, Myanmar, Vietnam and Malaysia, where we will either have joint ventures or make our own investment.”

CRG wants to introduce four new brands to the mass market, hoping for combined sales of 400 million baht by year-end. One of them is street food restaurant Aroi Dee, offering cookedto-order dishes priced from 59 baht.

Aroi Dee offers eat-in, takeaway and delivery, and the group has opened three branches this year on Silom Soi 32, a PTT gas station in Sai Mai and Thai Watsadu Bangna. CRG aims to open 10 such branches by the end of 2019.

“If it is successful, we will start franchising,” said Mr Nath.

CRG plans to launch a new brand, Suki House, with the first branch at Gateway Bangsue next month.

He said the new stores, which will comprise 100 franchise branches and 20 branches of its own brands, will be a key driver for sales growth this year.

Online and delivery are also expected to propel sales growth.

On April 25, CRG is scheduled to launch its own online delivery platform, CRG 1312, which will offer multi-brand delivery in a single order with a delivery fee starting at 50 baht and guaranteed delivery time of 45 minutes.

“Consumer behaviour has changed,” said Mr Nath. “Food delivery via online ordering is very popular with the new generation. Some spend 60 baht to order a glass of bubble tea with a delivery fee of 120 baht as they really want to have it.”

CRG will not invest in delivery staff, working instead with key aggregators like GrabFood, Line Man, Foodpanda and Honestbee. Currently it partners with LalaMove.

Last year the company recorded 80 million baht from delivery of non-KFC through call centre 1312, doubling growth from 2017.

After the launch of the delivery app, CRG expects sales from delivery of nonKFC eateries will grow to 400 million baht by year-end.

Including KFC, CRG has had 600 million baht in total sales via delivery. Total delivery sales should rise to 1 billion baht by the end of 2019, driven by CRG’s 1312 delivery app, he said.

In 2018, CRG posted 12 billion baht in sales, up 10% from 2017. The key driver was sales growth of 10% from KFC, which has 258 stores, up from 238 in 2017.

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