- GROUP OVERVIEW
STRATEGY & RISKS
Strategy, risks and key performance indicators
Strategy, risks and key performance indicators
- FINANCIAL STATEMENTS
John Dory’s is predominantly a seafood restaurant well known for its distinctly Mediterranean culture, charisma and family appeal.
John Dory’s produced its best financial performance in years. Restaurant turnover increased by 21.0% to R299.2 million (2013: R247.1 million) with sales from existing restaurants growing 12.0% on 2013. Franchise revenue rose by 21.8% to R14.3 million (2013: R11.7 million) and the division’s contribution to group profit before income tax increased by 16.7% to R7.7 million.
Our strong procurement department and long-term relationships with key suppliers have enabled us to secure very favourable pricing of raw material items for our franchisees. This has allowed franchisees to absorb some of the cost pressure from electricity, labour, fuel and the sharp increase in seafood prices. We have reduced pressure on franchisee cash flow margins by adjusting menu prices, rolling out new menus following an extensive menu engineering exercise and excluding high cost items from special offers. Operations management employees focused on overhead disciplines, accurate labour scheduling and stringent control over inventory management to assist franchisees further in maximising their profitability.
We expanded the John Dory’s sauce range manufactured at Spur Corporation’s secret sauce factory and implemented bottled peri-peri sauce for the tables. We continued our programme of installing live oyster tanks and kids’ play facilities and all our restaurants now have free wi-fi.
We gained new customers by creating national marketing exposure and initiating a television campaign. The rollout of the John’s Club loyalty programme is progressing well and we scrapped the joining fee and streamlined the registration process. Loyalty spend has been significantly higher than non-loyalty spend and there are strategies in place to further increase the swipe rate.
Franchisee training interventions focused on back of house skills development and improved product knowledge. We appointed a new sushi chef manager to maintain a high-quality sushi offering in an increasingly competitive environment.
As a brand, we are constantly looking for opportunities to instil good sustainability practices in our franchisees, suppliers, employees and customers. We strengthened our relationship with the Southern African Sustainable Seafood Initiative (“SASSI”) by supporting their education initiatives. We also established a partnership with SASSI’s parent organisation, the World Wildlife Fund (“WWF”), and helped to roll out their new water awareness and saving project. Our restaurants have also stepped up their greening efforts by switching to energy-efficient lighting, installing geyser blankets and refining the in-store ordering process to minimise waste.
John Dory’s opened five new restaurants despite the increasing competition for store space. We ended the year on 33 restaurants, which is on track for achieving our five-year target of 50 outlets. As the brand’s national store footprint does not match the geographic dispersion of the country’s population and economic activity, there is an opportunity to pursue locations actively in regions where we are not currently well represented.
The general consistency of operations, quality and brand communication across our restaurants has created a strong, clear brand positioning in the marketplace.
|Goals for 2014||Achieved in 2014||Goals for 2015|
|Open four new restaurants||Five new restaurants opened||Open seven new restaurants|
|Revamp/relocate eight outlets||Three restaurants were revamped||Revamp/relocate eight outlets|
|Continue to promote our weekday specials||Promotion of weekday specials is now well entrenched, launching a new national lunchtime promotion||Create loyalty around new menu items|
|Focus on improving our kids’ offerings||Kids’ facilities 72% of restaurants||All outlets to have kids’ facilities – further innovate our kids’ offerings to increase presence in the sit-down family restaurant market|
|Rejuvenate the brand’s vibe and spirit of generosity||Focus has been on creating a generous and fun family environment||Continue to improve the brand’s vibe and spirit of generosity|
|Create national marketing exposure||Achieved through our national TV campaign||Leverage TV campaign and expand to other channels, maintain consistent and clear brand message|
|Improve our operational disciplines||The operations team continually communicates operational best practice in their interactions with franchisees and at franchisee roadshows||Ongoing improvement of operational disciplines|
|Increase community involvement||More franchisee involvement in communities||Increase community involvement|
|Enhance our loyalty offering||John’s Club members reach 166 000 and account for 24% of total sales||Increase participation in loyalty programme|
|Expand into new regions of South Africa where the brand’s representation does not reflect the population size and economic activity|
Full details of our historic performance and goals are available in the key performance indicator table.