MK Restaurant Group, a leading company in the restaurant business, is planning to slow down its chain expansion and other further investments to cope with the COVID-19 impact.
Rit Thirakomen, the founder of MK Group, said that the restaurant business has a total value of 400 billion baht and it is highly competitive.
There is a wide range of products and services which means there are many opportunities for entrepreneurs to take part in this market.
In the past few months, the recession caused by the virus outbreak has forced many restaurants, especially small retailers, to close their businesses due to higher costs and a lower income.
However, since most restaurants have started to reopen, they have had to boost their strategies to stay competitive in the market once again.
A lot of companies are offering various incentive promotions to attract customers, which have escalated the competition among restaurants owners.
Rit said that 90 per cent of the MK Group’s revenue came from sit-in customers and the remaining 10 per cent from delivery orders.
The lockdown measure increased delivery sales by 3-4 times, but as of now, due to the easing of lockdown measures, the sales ratio is returning to normal.
However, the need to create a virus-free environment and practice social distancing measures have also affected sales.
Focusing on the profitable branches
MK group revealed that the company isn’t planning any large project investments but it is still looking to expand the business by developing the restaurant brand and taking over franchises to include its business acquisitions.
However, the company will delay the expansion of the MK and Yayoi restaurant due to the economic downturn from the COVID-19 outbreak. It will instead focus on profitable branches and close branches with lower profit.
The restaurants in MK Group consists of 10 brands: MK, Yayoi, Miyazaki, Le Siam Thai Restaurant, MK Harvest Dessert Shop and Laem Charoen Seafood.
The brands will strengthen their businesses via online platforms as well as adding a variety of menus with reasonable prices, Rit added.
Thai news media reported that in the first quarter of 2020, MK Group and its subsidiaries saw a 12.8 per cent year-on-year decline on their earnings to 3,795 million baht.
M shares price stood at 48.50 baht/share at 12:20 p.m. on Monday with an opening price of 49.50 baht/share, dropping -0.75 baht from the prior closing price or -1.52 per cent.