Steakhouse prepares for base pay walking
KT Dining Establishment Co, the operator of Santa Fe steakhouses, is set to reduce its brand-new dining establishment size and boost food rates to manage the everyday base pay trek due in April and the effect of disruptive innovation.
Surachai Chananudej, the business’s president, stated it will open about 20 brand-new Santa Fe dining establishments this year, however the size of chains will be reduced to 120-140 square metres from 120-200 sq m in 2015.
The smaller sized dining establishments will work with just 24 employees, compared to 30 at the bigger outlets, he stated.
The brand-new dining establishments arranged to open this year will be both owned by the business and franchises. The dining establishments will be opened primarily in Bangkok, Chon Buri’s Laem Chabang and Pattaya, where consumers have comparable way of lives and great costs power.
The brand-new branches will bring the overall dining establishment tally to 123 throughout the nation this year. Combined financial investment is approximated at 100 million baht this year.
Mr Surachai stated the business is likewise preparing to raise menu rates by 5% typically to manage greater production expenses, partly due to the greater base pay, which is anticipated to raise monetary expenses by 12 million baht a year.
KT Dining establishment pays 240 million baht in earnings annually to 1,700 employees across the country.
Employees represent 23% of the business’s overall operation expenses, the second-largest operation expense after basic materials, that make up 40%. The staying 37% makes up lease, electrical power expenses and others.
” The requirement to raise rates is unavoidable, not just since of the everyday wage walking however likewise the unfavorable effect of online shopping,” he stated. “The development of online shopping has actually resulted in the closure of numerous stores in shopping center.”
” Shopping center owners have actually included pastry shops, dining establishments and coffeehouse to draw more traffic, increasing to 70 stores at some shopping malls, up from just 40 stores over the previous 3 years.”
More dining establishments at retail complexes has actually activated intense competitors and lower revenue margins, stated Mr Surachai.
” Our sales grew by just 10% in 2015 to 1.65 billion baht, compared to typical 25% sales development in the previous couple of years,” he stated.
Nevertheless, Mr Surachai stays positive the steak dining establishment will continue to be a popular option amongst restaurants.
Thailand’s steak dining establishment company is approximated at 6 billion baht. Leading brand names in the nation consist of Sizzler, Jeffer and Santa Fe.
He stated the business likewise prepares to include brand-new menu products to draw unique consumer groups. Another objective is to increase its marketing budget plan to 100 million baht from 80 million.
KT Dining establishment wishes to branch off to neighbouring nations through franchising in the 4th quarter of this year, beginning with Vietnam and Cambodia, stated Mr Surachai.
The business prepares to have 5 Sante Fe dining establishments in 4 other nations by 2020, with overall sales reaching 3 billion baht.
He stated the business’s sales are anticipated to resume 25% development in 2018 to reach 2 billion baht.
