For Alsea, 2021 is the year of resilience. The operator of brands such as Starbucks or Domino’s Pizza faced the most challenging year due to the pandemic in 2020 and now, with COVID-19 infections giving way in the markets where it has a presence, the focus is on recovery.
The company, which also operates the Vips restaurant chain, expects to return to the sales levels of 2019, that is, before the health emergency, next year, according to what executives advanced in a call with analysts in April. To cross this threshold, Alsea extended its loan agreements with banks until June 2022, and according to its perspectives, this will allow them to continue their “strategic projects” to maintain their organic growth.
The company has a plan: it will strengthen home delivery of all its brands and, although it will close the least productive restaurants, it will seek to get people to return to their establishments as the countries where it operates relax mobility measures and restrictions on minor COVID-19 infections.
Rafael Contreras, director of Administration and Finance of the company, details that despite the restrictions that still remain in some countries, at the end of the first quarter of this year 91% of the units had their doors open, while only in Mexico, 97% of the restaurants were reopened, under the regulations of capacity and limited hours that local governments have implemented.
“We know that we will have a significant increase in the number of customers who visit our restaurants. Alsea is well positioned to face the new macroeconomic environment and we are ready to welcome our clients back to 100% of our capacity as soon as sanitary restrictions allow us. Today we are a more agile, efficient and competitive company ”, affirms the manager in an interview with Expansión .
The pandemic hit for the restaurant was accurate and cut the company’s sales by 33.4% at the end of 2020. In the first quarter of the year, Alsea had a turnover of 10,212 million pesos and with this reduced the fall in income, which was 15.6 % compared to the same period last year.
From January to March, the company’s revenues in Mexico represented 48.7% of its consolidated sales, reaching 4,975 million pesos and, for now, sales continue to focus on home deliveries and take away counter sales.
Between delivery and physical sales
To consolidate its response to shopping habits in the new normal, the company presented its Wow + delivery platform, which will allow you to make deliveries with your own delivery people, as well as with aggregators, such as UberEats, Didi or Rappi, where you already sells its menus. The operator has 10% of home deliveries in the country and with Wow + they intend to increase participation.
Contreras says that the pandemic led to accelerate these digital strategies that the company had planned for the medium term, while innovations open the door to strengthen the position of its different brands in the market. For now, evaluate the future viability of the tools that have been used during the contingency, but with the focus on the physical sale in the different restaurants.
“This strategy has become increasingly important and is now one of the pillars of our business,” he says. “During the first quarter of 2021 we implemented Starbucks Mobile Order and Pay, strengthening our digital presence. Additionally, we achieved a 64.9% growth in delivery compared to the same period of 2020, which represents an amount greater than 2,800 million pesos and a 31% share in Alsea’s consolidated sales ”.
The company adjusted its remodeling and opening plan and, for now, the outlook for new stores by geography is still uncertain. The firm focuses its efforts on the gradual reopening of its restaurants to reactivate the operation to 100% of its capacity, as the pandemic subsides.
During the first three months of 2021, Alsea made capital investments in the opening of 10 units, as well as in the renovation and remodeling of others. Globally, it will maintain its expansion strategy with the net opening of around 50 restaurants, most of them at the end of the year.
For now, there are signs of recovery: Starbucks sales increased 1.5% and Domino’s Pizza in Mexico grew 10.3% in the first quarter of the year. Burger King maintains a sales level of 94.3% compared to the levels of the first quarter of 2019.
“We see Alsea maintaining its leadership position in all markets where it operates. For this, we are promoting the digital transformation of the company, which includes various projects such as data analytics, digital marketing and delivery, without neglecting the experience within our units, resuming the history of successful growth thanks to which the company is recognized. We hope to have a higher profitability of the business, due to everything learned and implemented at this time ”, assures the manager.
