Nando’s has strong appetite for expansion

KUALA LUMPUR: Nando’s Chickenland Malaysia Sdn Bhd is planning to reach 140 stores across Malaysia within the next 10 years, from 69 stores currently, with an investment of between RM1.3 million and RM1.5 million per store.
“Now what we have worked out for our 5-year plan is to open 13 stores every year for the next five years. In the next 10 years, Nando’s is going to have 140 stores,” its group CEO Mac Chung Lynn told SunBiz during an interview.
Mac, who is also the group CEO of Nando’s Chickenland Singapore Pte Ltd, said the company plans to open 10 stores this year. In 2014, it opened 14 stores in the peninsula, Sabah and Sarawak.
“I think we did it very fast last year, so we decided to slow it down a little bit this year, just to get our people (employees) in place.
“We can’t have a fast growth plan without the support of the people in place. So from next year onwards we will open 13 stores a year again,” she said, explaining that both Malaysian and Singapore operations are 70% owned by Mac’s family, while South Africans own the remaining 30%.
Last year, the company moved out of main city centres to areas such as Seremban, Taiping, Kota Kinabalu and Kuantan. Previously it had concentrated on the Klang Valley, Penang and Johor Baru markets.
“For 2016, we will try to open a store in Kelantan,” Mac said, adding it intends to enter new markets in Kuching and Kedah this year, leaving Perlis the only state the company has not planned to venture into yet.
On its financial performance, Mac said the company’s earnings before interest, tax, depreciation and amortisation (ebitda) stood at RM15 million last year and is looking at the same amount for 2015.
According to Mac, its sales have been growing positively for the last five to seven years, with an annual growth between 15% and 20% each year.
“Last year, it was about 15% growth. This year, we will grow about the same amount,” Mac said.
For Nando’s Chickenland Singapore operations, she said the company plans to open two to three stores per year and has opened three stores last year.
“This year, we will open another three stores in Singapore as well,” she added.
Commenting on the Goods & Services Tax (GST) impact on its business, she said the company saw its sales decline by 10% in April post-GST, mainly due to consumer sentiment on the new tax regime as well as the 10% service charge issue.
“The first four months for us was slower than we expected. I think it is a combination of GST, where people were being cautious (in spending) and the whole service charge aspect that also came into play.”
“It is basically confusing the consumers. They have been paying service charge all these years for the last 20 years, and I think that has created a lot of wariness about eating in dining restaurants,” she added.
Moving forward, Nando’s will continue to focus on its existing stores sales, as well as growing its new store sales. It is also looking to re-launch its delivery service.
On its outlook for the food & beverage (F&B) industry, Mac said she does not see any reason why the F&B industry will not continue to grow, despite consumer’s sentiment on the GST and service charge.