Alsea, owner of brands such as Starbucks and Domino’s Pizza, managed to reverse inflation, at least in the first quarter of the year. However, in the future, he does not rule out making some adjustments in the operations of his restaurants to maintain sales levels, which since the end of last year have been above pre-pandemic levels.
Until now, the company has made use of several operating adjustments to lessen the impact of the high costs in some raw materials, however, it keeps its finger on the line on strategies to improve the cost structure and keep operations positive.
Rafael Contreras, director of Administration and Finance of the restaurant operator, announced that the company is making price increases on products with a greater inflationary impact , in addition to offering fewer promotions to diners to contain the impacts. To this is added that they launch new products that have a higher cost, which customers are willing to absorb.
Added to this are improvements in logistics chains. The company advances purchases of supplies when they are at a “good price” and to have available inventory, which allows buyers to have a known price and provides room for maneuver for the commercial strategies of all its brands.
“We are going to implement these decisions and we will be taking them every month depending on the real inflation that we are seeing in each of the products that we handle,” explains Contreras. “This is in each geography and in each brand, because the increase in supplies is very different in each place and for each product. We have had increases where it has been needed and the result has been positive because orders have not dropped and we were able to maintain the margin at what we had projected for the quarter,” the manager said at a press conference,” he adds.
The results of these implementations are positive. The executive explained that costs for the quarter were reduced by 80 basis points and represent 31.8% of sales despite inflation, “This validates our commercial strategy of cost containment,” he declares.
In the first quarter of the year, Alsea increased its revenues 49.1% to 15,228 million pesos, from 10,212 million dollars in the same quarter of 2021. In addition, its operating flow increased 69.1% and net income was 512 million pesos, with which it reversed the loss of 469 million pesos from the same period last year.
The recovery of consumption
Alsea has managed to boost sales in all its restaurants since last year, and in Mexico this recovery has been maintained since the end of last year, and for the manager, one of the points in favor is that the demand through its application of delivery are maintained despite the fact that the restaurants of some of its brands already have optimal levels of counter sales. “We have some brands that are reaching 2019 sales and we hope that they will improve going forward,” he says about it.
In Mexico, Starbucks, Burger King and Domino’s continue to be the best performing brands, with same-store sales growth of 42.2%, 38.1% and 32.2%, respectively. The surprise was Vips, which had a growth in sales in restaurants with more than a year in operation of 82.1% compared to the first quarter of 2021.
Meanwhile, the company maintains its plans to invest 4.8 billion pesos in 2022, resources that will be oriented mainly to the opening of between 220 and 260 restaurants, both in the Mexican market, as well as in Europe and South America. In the first quarter of the year, the company spent 712 million pesos, of which 49% was allocated to maintenance, 36% to store openings and remodeling, and 15% to other projects.
