The legendary A&W fried chicken restaurant chain is to close on March 20 after almost four decades, after its SET-listed parent Global Consumer Plc (Glocon) threw in the towel because of accumulated losses and the impact of the Covid-19 pandemic.
A sales representative at an A&W restaurant in a Bangkok petrol station, who asked not to be named, said the company had informed A&W's staff in advance about its closure, with compensation paid in accordance with labour laws.
The doors of all 24 A&W restaurants will simultaneously close on March 20, confirmed Glocon chief executive Nopporn Phatthararuchi, but its licence to operate them will expire on March 31.
Glocon acquired a master franchise licence to operate A&W restaurants in Thailand in 2018 under NPP Food Incorporation Co. A&W sales are currently less than 100 million baht, down from almost 200 million baht in 2018.
Louise Taechaubol, Glocon's executive chairwoman, earlier said that A&W is the group's only business unit that remains stuck in the red, and the company had delayed its investment plan for the restaurant chain for 2020 and 2021.
With continuous A&W losses, the company has tried to adopt new strategies to improve its bottom line, including selling its products through food trucks at petrol stations instead of traditional restaurant concept, and selling waffles at 7-Eleven convenience stores to expand its customer base. However, it still suffered an operating loss of 70 million baht in 2021.
An A&W restaurant at Bitec.
Glocon reported total sales of 1.86 billion baht in 2021, a 23% increase on 2020.
"The market of the quick-service restaurants is relatively high competition. In each location, our restaurants were surrounded by strong competitors both direct and indirect,'' the A&W sales representative said.
Thailand's quick-service restaurant business was estimated to be worth 40-42 billion baht in 2021. A total of 45% of sales belonged to the fried chicken business, while the remainder stemmed from segments such as pizza and burgers.
Thanks to stiff competition and a sharp decline in foreign tourist numbers, sales at some A&W branches have plunged to between 10,000-17,000 baht per day, compared to a peak of 30,000 baht in the period before the start of the pandemic.
Rising costs of raw materials and energy, as a result of the Russia-Ukraine war, have exacerbated the firm's woes.
In addition, the number of international tourists arriving, including from Russia under the Test & Go scheme, has continued to decline.