Sunday, June 26, 2022
Martin Hennecke

Cafe de Coral menu may see $1 price hike
<p>Cafe de Coral (0341) is not ruling out a price hike as it saw its net profit plunge by 50 percent year-on-year to HK$81.20 million for the six months ended September, with no pandemic aid from the government this year.</p><p>Facing pressure from food costs and labor expenses, chief executive Peter Lo Tak-shing said yesterday that the fast-food restaurant chain may increase prices strategically by around HK$1 by restructuring the menu, but there is little room for higher price increases.</p><p>The average spending per person rose by around HK$1 to HK$39.1 in the first half of the year compared to last year.</p><p>Meanwhile, revenues were still 10 percent lower compared to pre-pandemic levels, while disruptions in the supply chain was taking a toll on the firm&#39;s operations mainly due to the shortage in containers, said Lo.</p><p>&quot;The cheaper [the ingredients], the more shortage of goods,&quot; he said.</p><p>For instance, there has been a shortage in onion rings in recent months since the price was too low, Lo said, and the company was forced to change the menu or use substitutes.</p><p>With patrons obliged to use the government&#39;s Covid-19 Leavehomesafe contact-tracing app from December 9, Lo said it is hard to project customer reactions but staff will be taught how to handle any possible situations that may arise once the mandatory use comes into effect.</p><p>He added that the group is considering turning some of its casual restaurants into Type C operations, which allows two more people to sit on the same table compared to Type B, given that 80 percent of its staff have received two Covid-19 vaccinations. However, the group&#39;s main brand Cafe de Coral chiefly serves basic livelihood needs and will maintain operations at Type B, said Lo, while hoping that the government will ease restrictions.</p><p>The group plans to open eight stores in Hong Kong and 27 in southern China in the second half, he said.</p><p>Excluding government Covid-19 subsidies totalling HK$338.9 million from last year, net profit rose by 1.46 times and revenue increased by 20 percent to HK$3.87 billion year-on-year in the first half. The gross profit margin jumped by 5.5 percentage points to 9.8 percent.</p><p>An interim dividend of 10 HK cents was declared with basic earnings per share falling 50 percent to HK14 cents.</p>

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