RFG slashes suppliers, plans for growth

Retail Food Group is making significant changes across its franchise brands to recalibrate the business.

And in a first for the network, CEO Richard Hinson has travelled the country to share with franchisees first hand the upcoming changes.

Top of the list is cutting back the number of suppliers working with the group.

RFG will put its $100 million plus distribution business out to tender, reducing the number of suppliers from 16 to one or two, and cutting back the volume of items from 15000 to about 3000 SKUs.

Hinson told AFR the business hadn’t taken advantage of opportunities to leverage its buying power.

The move to condense “our pantry of products down to economic run sizes” will mean “franchisees will start getting great quality products through a distributor that has national capability and can deliver a service better than we are seeing at the moment,” he said.

Hinson plans to turnaround the business with lower COGs, reduced franchise fees, re-establishing better field support for franchisees, closing unprofitable stores.

There’s a fresh focus for merchandising too, starting with Donut King, according to Fairfax media. Franchisees will be breaking up the regimented lines of doughnuts and giving their display cabinets a more boutique feel, with the sweet treats piled high on different-sized plates.

One store which is piloting the new look reportedly had sales boosted by about 8 per cent.

If the trials are successful, the approach will be rolled out across other brands. Hinson suggested store sales growth of between three and five per cent could be significant for the business.

Hinson told Fairfax, “Shopping centres have over-indexed on food so there’s lots of competition – what we have to do is stand out from the crowd with food that looks fantastic.”

A survey following Hinson’s national roadshow revealed 75 per cent of franchisees backed the company’s plans.

RFG was contacted for comment.