The food and beverage companies Central Restaurants Group, PTT Oil and Retail Business Plc, and KT Restaurant, which operates the Santa Fe steak chain, are to expand in the second half of this year despite the political and economic instability.
According to Nath Vongphanich, president of Central Restaurants Group (CRG), the company will invest 600-700 million baht to open new restaurants in the latter half of the year, excluding merger and acquisition projects.
CRG ON FOOD BRANDS
The focus of this expansion will be on food brands that have partnered with business alliances, including Salad Factory, Shinkanzen Sushi, Nak-la Mookata, and potential brands such as KFC, Auntie Anne's, Pepper Lunch and Somtum Nua.
Additionally, CRG is in talks to acquire a shabu and yakiniku restaurant operator to include these types of cuisine in its portfolio, and is considering expanding abroad through joint ventures and greenfield investments, particularly in Vietnam, where Central Group has a strong presence.
"Tourism serves as a growth engine for the food business, and the company is more concerned about the stability of the Covid-19 situation than political factors," Mr Nath said. "Politics has relatively less impact on the food business since food is a daily necessity. However, the company will remain cautious in its investments."
Despite consumers' reduced spending power due to various burdens, such as electricity bills and household debt, Mr Nath said CRG aims to alleviate consumers' pain points by offering them value-for-money menus and promotional offers.
Mr Nath said the overall market sentiment of the food business in the first five months of this year was quite positive, although the tourism atmosphere in key locations like Chiang Mai, Phuket and Pattaya has not yet returned to pre-crisis levels.
New Santa Fe restaurant concept called Santa Fe Easy was recently launched to capture customers of the younger generation.
SANTA FE'S REBRANDING
Sombat Hongpaitoon, chief executive of KT Restaurant Co, the operator of Santa Fe restaurants, said his company is undergoing a rebranding process to give Santa Fe a more modern look next year.
This rebranding initiative marks the first major update to the restaurant's appearance in the past decade, and has been prompted by escalating competition in the 400-billion-baht food industry, driven by the entry of new restaurants.
"In response to the disruption caused by the shabu sukiyaki segment, we have adjusted the expansion plans. We have opted to open only eight new restaurants this year, down from 20 last year," Mr Sombat said.
Mr Sombat also expressed concerns about potential labour cost increases of 10-20% under the new government, as pledged by election-winning parties. The company has therefore introduced some robots at its restaurant in Future Park Rangsit and plans to expand their usage to other branches if they enhance operational efficiency.
As of now, there are 120 Santa Fe restaurants operating across the country. In the first half of this year, three new Santa Fe restaurants were launched, and an additional five are scheduled to open in the second half of the year.
In an effort to expand its customer base, the company has ventured into the grab & go concept with "Santa Fe Easy", offering steak and burger menus. This new approach targets the younger generation of consumers, complementing the original Santa Fe concept that caters to families. There are currently 10 Santa Fe Easy outlets strategically positioned at universities, hospitals and petrol stations.
PTT'S EXPANSION MODE INTACT
On the other hand, PTT Oil and Retail Business Plc, a subsidiary of the state-owned energy giant PTT Plc, has ambitious plans to open 400 Cafe Amazon locations in the second half of this year, with 85% being in domestic locations and the remaining 15% overseas.
According to Suchat Ramarch, president of PTT Oil and Retail Business, the new Cafe Amazon outlets will be established both under the franchise system and stand-alone cafés occupying a space of 40-50 square metres.
Currently, revenue from coffee and retail businesses has seen significant growth, contributing to 65-70% of the total revenue at their petrol stations, up from 50% in the past. To sustain this growth, the firm plans to expand its retail space to accommodate more tenants and franchisees.
In addition to the café expansion, the firm is diversifying its portfolio by launching canned coffee products for sale at 7-Eleven convenience stores and expects to sell over 8 million of them this year.
PTT Oil and Retail Business currently operates around 4,000 Cafe Amazon branches in Thailand and overseas, covering 11 countries.
"Regardless of the political landscape and the prime minister in power, our expansion plans will stay on course," Mr Suchat said.