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  1. #21
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    quote:Originally posted by bongo66

    Egged on by Matt Mc Carten and his commie mate in parliament-i forget her name-Starbucks employees in Newmarket went out for 2 hours over lunchtime.

    They want a minimum $12 an hour, no youth rates and guaranteed working hours for part-timers.

    If this should come to pass it would almost bury RBD-wages are one of their biggest costs.
    A wild claim? There isn't enough declared information in the RBD annual report to be sure. But let's try to verify it anyway.

    There is a provision for employee entitlements in note 14 of the annual report. If the 'partners' turn over once per year, there are many lower skilled job employers that don't allow annual leave to be taken until one year in the job has been served. So we might guess that the $5.734m figure quoted represents 3/52 of the total employee wage bill.

    If that is true , the employee wage bill is:

    $5.734*52/3=$100m. Of course 51 of the 278 listed stores are not in New Zealand. Australian wages tend to be higher anyway, by let's say 20% in NZD terms. That makes the Oz stores equivalent to 61 (ten more) stores in 'NZ wage' terms.

    That means we can estimate the NZ wage bill at:

    $100m*([278+10-61]/10+278)= $79m

    Remember that includes associated head office expenses that I have previously estimated at $4m. take that off and you get $75m

    Does that sound reasonable?
    $75m/227= $330,000 per store. Spread that over 16 staff and you get an average wage of $20,625pa. Still sound OK?

    Boost the wage bill by 20% (from $10/hour to $12/hour) and you get an extra wage cost of $15m, equivalent to last years profit of $11m if tax is added back onto it. So yes, RBD's profit would be wiped out, assuming that they would not be able to recover any of these increased costs (a doubtful assumption). Bongo's claim looks in the ballpark at least. No doubt the economics of other wage paying fast food outlets are similar.

    My take on these figures is that 'deep down' the unions know that a 20% wage claim isn't going to happen in one hit. But of course you have to aim high in wage negotiations! Auckland workers may find their plight alleviated by Auckland house prices falling 20% instead!

    SNOOPY





    Watch out for the most persistent and dangerous version of Covid-19: B.S.24/7

  2. #22
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  3. #23
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    The minimum wage has no effect on profits what so ever. It is the same as in my trade being a builder. I wouldnt care if a carpenters minimum wage was $20-00 or $40-00 an hour, my opposition has to price accordingly. Whatever it was i would still pay extra to keep the best people, which is one little lesson that RBD might like to pick up on. When you pay people the minimum thats what you can expect back. I would expect if RBD payed double the wages to half the people the service would be improved out of sight, with half the labour force. macdunk

  4. #24
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    Yep, I held off buying DMP (on ASX) as I thought they looked too pricey, now looks like the price has just gone up !

  5. #25
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    i total agree with this. It has been there problem for years.

    This group is the biggest dog on the stock exchange. I use to own and was luck enough to get out at 1.70$.

    There marketing is a joke, there service is terrible, they would be better to turn them into
    fast paced drive throughs and then they could get away with the pimple people and the bad service.

    Lets face it no one goes to KFC to sit in the restraunt part do they, unless they want to catch a disease. They are grot.

    This company will be 70c within 2yrs.

    LMFM






    quote:Originally posted by duncan macgregor

    The minimum wage has no effect on profits what so ever. It is the same as in my trade being a builder. I wouldnt care if a carpenters minimum wage was $20-00 or $40-00 an hour, my opposition has to price accordingly. Whatever it was i would still pay extra to keep the best people, which is one little lesson that RBD might like to pick up on. When you pay people the minimum thats what you can expect back. I would expect if RBD payed double the wages to half the people the service would be improved out of sight, with half the labour force. macdunk

  6. #26
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    i work in the ad industry and on their accounts before- trust me the advertsing is crap and
    it does not help them sale KFC or PIzza. Research proven.

    Second if you think there service is good it's probably what your use to.

    Divi argument is ok but the future looks fatty.

    LMFm



    quote:Originally posted by hiawatha

    LMFM
    disagree on all counts. service ok in my experience. advertising ok.
    I'm no longer a holder as I'm uncertain how long a high dividend can be maintained. And I think higher wage costs on top of that will be damaging.
    hiawatha

  7. #27
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    Last time I was in a KFC (Kaitaia, about 4 years ago) a (obviously "wound up") woman came in screaming that she wanted to see the manager, she had got takeaways for her kids, and saw one of the chicken pieces was undercooked (raw and bloody) once manager saw the bits in question, she was immediately refunded her money, and offered an opology, I decided to get my lunch at the "golden arches" of McDonalds instead. Never returned to any KFC since. Sure it may be an isolated instance, but dosent take much of that sort of thing to ruin a brands reputation.

    By the way, has anyone bothered (I havent) to analyse where profits come from by division (KFC,pizza,starbucks) ? As I wonder if they could sell KFC and concentrate on the divisions with growth potential ? Just a thought.

  8. #28
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    quote:Originally posted by duncan macgregor

    The minimum wage has no effect on profits what so ever. It is the same as in my trade being a builder. I wouldnt care if a carpenters minimum wage was $20-00 or $40-00 an hour, my opposition has to price accordingly. Whatever it was i would still pay extra to keep the best people, which is one little lesson that RBD might like to pick up on. When you pay people the minimum thats what you can expect back. I would expect if RBD payed double the wages to half the people the service would be improved out of sight, with half the labour force. macdunk
    D M.

    Companies like RBD will be affected by the minium wage increase. This will also have a huge flow on effect to their suppliers as well. Primarily they will only be able to sustain or improve their profits by either reducing costs or increasing revenue. Their operating costs are going to go up with the wages. with their main suppliers of Inghams and Mr Chips, these companies may be forced to increase their prices because of their wage increases that need to be passed onto their workers. So on and so on.

    I think short term RBD will have to increase the prices for their products to maintain a half decent margin. Their margins must be so tight as it is. How the customers react to any increases will really determine the viability. Medium to long term? I think their needs to be a change in focus otherwise it will be a slow and painful death. At least the likes of Mackers are targeting the health conscience with the salads etc to keep up with the change in eating habits.

    I just cant see where to growth or increase in profits are going to come from unless there are some serious changes to their stratergies

  9. #29
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    quote:Originally posted by kura


    By the way, has anyone bothered (I havent) to analyse where profits come from by division (KFC,pizza,starbucks) ? As I wonder if they could sell KFC and concentrate on the divisions with growth potential ? Just a thought.
    Problem with that a fair chunk of their profit (and thus divs) come from KFC ..... Starbucks prob run at a loss and PH make some (prob marginal although improving) profit

    RBD are very very coy about disclosing any financials below their "concept ebitda" line .... and their is significant expenses below that that need to be apportioned between the concepts .... they are not keen to share anything either as i have tried

    “ At the top of every bubble, everyone is convinced it's not yet a bubble.”

  10. #30
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    Kura, KFC is still a huge part of profits. Have a very basic spreadsheet model - e-mail me if you want it to play with.

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