The restaurants posted overall revenue worth some EUR85 million last year.
The manager, who arrived in Romania in late 2011, manages KFC, Pizza Hut, Pizza Hut Delivery, Paul and Cinnabon networks. The domestic group also includes Hard Rock Café unit of Herastrau park, about which Hilton says it has a different management.
“This year had a very good start, with KFC, Pizza Hut, Pizza Hut Delivery and Paul posting advances of above 10% in the first three months. We hope we’ll keep up the growth pace”.
The British executive believes the group’s marketing policy and promotions are bearing fruit. The company’s offers have centered on price, as Romanians are still careful about the way they spend their money.
“This type of campaign is a way to gain clients’ loyalty. Business growth largely comes amid strategy implementation. Consumption is also giving signs of a rebound, but increases are not significant ones. Moreover, I do not know how sustainable these signs are considering the upcoming elections”.
The growth driver in 1Q was KFC brand, with 52 restaurants, of which four opened last year. Since early 2014, a drive-thru unit has been opened in Bucharest district Militari and another such unit is scheduled for opening by yearend.
“The strategy of focusing on KFC drive-thru restaurants is working. Investments in such a unit revolve around EUR700,000, twice the sum needed for the opening of a unit in a mall, but the figures are also good”.
In 2013, KFC’s revenue in Romania rose by 15%, to EUR48.3 million. “We served 25 million consumers last year, up on the year. We also noticed a cash receipt increase”.
KFC is the second largest player on Romania’s restaurant market after McDonald’s. On the fast-food segment, the two giants also compete with Subway, after Burger King exited the market.
Expansion plans for KFC brand will not stop here and Mark Hilton states he wants to speed up expansion in 2015-2016 and get to open 5-6 units per annum. “It’s more difficult to open a drive-thru as you must find a good land plot, but our focus is on this format. For street-front locations we do not have plans, yet, but we’ll be considering any opportunity and as regards shopping centers we’re present in all the key units. We’re expecting the next openings”.
The executive says the group he runs does not seek to buy, but to lease land plots. He adds, though, that in recent years, despite the crisis, the prices of the best spaces have not declined.
In 2013, the company invested EUR2.3 million in brand development, opening four KFC units and two Paul ones. Paul bakery chain, addressing above average income clients, has reached 11 units in Romania.
“There is room for further openings so that we’re still seeking spaces for 2014. We’re also looking at Bucharest’s old town”.
The two brands, KFC and Paul, are the only ones for which there are expansion plans this year.
“In 2015, we’ll resume expansion for Pizza Hut and Pizza Hut Delivery as well”. In the case of the delivery business, the executive says it has good results in Bucharest, posting growth by above 10%. The company is now testing the business model outside Bucharest as well.
In the case of Cinnabon, the company retained just two units and is now trying to stabilize the business that lost 35% in 2013, the only declining brand in the group. “Strategies need time to bear fruit. We hope this is also the case of Cinnabon. Though we have global brands in our portfolio, we have local strategies for each of them, as one needs to know one’s clients to grow”.
The group led by Hilton has budgeted a 10% revenue increase for this year. “We want to grow and we can do this by developing the brands we already have in the portfolio, but also by bringing a new brand. We’re in no hurry, but we’re analyzing the market. It will certainly be a restaurant brand”.
(English version by Catalina Apostoiu)