Gloria Jean’s to unveil new concepts

Inside Franchise Business: Gloria Jean's is freshening up its offerLook out for a raft of fresh Gloria Jeans concepts to be launched next year.

The brand’s parent company, franchisor Retail Food Group, plans new initiatives to bolster the performance of the brand amid a slump in sales during the first 18 weeks of FY18.

Speaking to investors at RFG’s Annual General Meeting on Thursday, Andre Nell said Gloria Jeans would shift its customer proposition to increase its focus on fast casual dining, including things such as all-day breakfast and fresh grab and go options.

“Consumer tastes and trends evolve, elevating coffee as a specialty product with a devout following focused on bean provenance, roasting processes and the skills necessary to achieve the perfect cup of coffee,” Nell said.

“Complementing this activity is the brand’s entry into fast casual dining, with an all-day breakfast menu and cafŽ offering including ‘made in store – fresh is best’ grab and go options and new ‘hero’ products,” he continued.

An unspecified number of pilot stores will launch domestically in the third quarter of financial year 2018 before a broader roll-out.

RFG is under pressure to get Gloria Jeans, which it acquired in late 2014, back on track as sales continue to struggle, with its coffee division _also consisting of Cafe2U, Coffee Guy and It’s a Grind_ showing a 1.6 per cent decline in same-store sales in year-to-date (YTD) trading.

The result was the worst of RFG’s retail franchise divisions, with total same-store sales up just 0.7 per cent YTD.

The group’s QSR division _Pizza Capers and Crust_ performed, with same-store sales up 2.7 per cent in what Nell said was a highly competitive market increasingly characterised by online service providers.

Bakery and CafŽ _Donut King, Brumby’s Bakery and Michel’s Patisserie same-store sales increased by 1.1 per cent.

However, while QSR performed comparatively well the division was a much smaller contributor to earnings and gross franchise revenue for RFG in FY17 than the bakery and coffee divisions.

Nell said first half domestic franchise division performance is expected to be lower than the prior corresponding period, and that a cautious view was being taken on the full year.

Despite that, Nell said the 6 per cent net-profit-after-tax guidance previously provided by the company stands.

“RFG retains an optimistic outlook despite the challenging domestic retail market, with domestic franchise division performance anticipated to be weaker than originally forecast, offset by new business gained across our other divisions, largely commencing in 2H18,” Nell said.