Retail Food Group reports loss and new marketing plans

Poor financial results amid ongoing efforts to turn around the business and address issues with brand relevance and challenging retail conditions

The Retail Food Group (RFG) is continuing the rollout of a raft of new product marketing initiatives for its Michel’s, Brumby’s and Gloria Jean’s network amid poor financial results, including a statutory net loss after tax of $149.3 million.

The food group’s new product and marketing strategy will deliver a rolling pipeline of 62 new campaigns over the next 12-18 months, which the company hopes will turnaround its profitability. So far, this has included new campaigns aligned with popular brands, such as the Nestle Kit Kat Chillers campaign in Gloria Jeans, which was complemented by a social media campaign. 

“While the rollout of this new program remains in its infancy, its recent launch via nine bespoke new product campaigns has so far generated annualised incremental network revenue growth of over $5 million. This is a very positive indicator of the potential impact of these new initiatives, which we expect will materialise throughout FY20,”  RFG executive chairman, Peter George, said in a statement.

RFG has also focused on social media and influencer campaigns, including partnerships with celebrity ambassadors to connect with consumers. Some of these initial marketing initiatives have reached between 6 to 12 million customers, per campaign, the company said. 

In other plans, it has improved point-of-sale displays and new packaging has been introduced to better align the brands to their target markets and drive brand recall and recognition. A new coffee and loyalty program has been created to target customer growth, aimed at generating a 6 to 7 million customer database in the first 24 months. It has also reduced the wholesale price of coffee and re-introduced fresh cakes into Michel’s retail shops in several states.

“These new initiatives demonstrate the focus of RFG’s new management team who are dedicated to developing and cultivating every single one of our stores and providing our franchisees with the best possible support and opportunities to build successful and sustainable businesses,” George said.

Financial outlook

It couldn't come at a more needed time. For FY19, Retail Food Group reported underlying EBITDA of $50.7 million and underlying net profit after tax of $15.4 million. Yet it reported a statutory net loss of $149.3 million, attributed to $185.2m in no-cash impairments including provisioning and restructure costs. The group is looking to cut $20m from the annual costs of operations in the next year.

The company said intense competition and changing consumer trends, set against declining retail performance, contributed to challenging operating conditions. RFG pointed to high occupancy costs in shopping centres and changing tenancy mixes and foot traffic contributing to its lacklustre performance.

In its executive suite, there have been some key changes including the appointment of turnaround specialist, George, as executive chairman to drive business improvement and refocus the group on its core competencies of retail food franchising and coffee supply.

George said RFG expects to see stabilisation and future growth through the work currently underway, and expect improvements to come. 

“The new management team is rebuilding the culture of RFG and will continue to strengthen our franchisee-first focus and position the group for growth in the medium term,” he added.

Follow CMO on Twitter: @CMOAustralia, take part in the CMO conversation on LinkedIn: CMO ANZ, follow our regular updates via CMO Australia's Linkedin company page, or join us on Facebook: https://www.facebook.com/CMOAustralia.     

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.
Show Comments

Latest Videos

Conversations over a cuppa with CMO: Microsoft's Pip Arthur

​In this latest episode of our conversations over a cuppa with CMO, we catch up with the delightful Pip Arthur, Microsoft Australia's chief marketing officer and communications director, to talk about thinking differently, delivering on B2B connection in the crisis, brand purpose and marketing transformation.

More Videos

Hey WhatsApp chatbots need to be added to a business’ tool belt to engage with the always-on customers. Easy to build in literally 5 step...

Unnit Dedhia

How chatbot marketing brought a supernatural exhibition to digital life

Read more

We’re seeing an increase in customer loyalty after businesses began implementing Live Chat. Here’s your one-stop guide on Live Chat suppo...

Fiza Syed

Customer loyalty in the time of COVID-19

Read more

JP54,D2, D6, JetA1 EN590Dear Buyer/ Buyer mandateWe currently have Available FOB Rotterdam/Houston for JP54,D2, D6, JetA1 with good and w...

Collins Johnson

Oath to fully acquire Yahoo7 from Seven West Media

Read more

Hi This is George, Thanks for sharing this nice information about foodpanda blockchain. During this pandemic situation food delivery indu...

George David

foodpanda launches blockchain-based out-of-home advertising campaign

Read more

Did anyone proofread this document before it was published?

Beau Ushay

CMO Momentum 2020: How to embrace agile marketing

Read more

Blog Posts

Commissioning personas that get used

How to avoid the bottom drawer, and how to get value from the work you’ve paid for

Melanie Wiese

Chief strategy officer, Wunderman Thompson

Why It’s Going To Be A Bumper Holiday Season Despite the Pandemic

Behavioural science expert Dan Monheit, co-founder and strategy director of creative agency, Hardhat, writes that marketing chiefs should hold their nerve, as they have reason to be optimistic

Dan Monheit

Co-founder, Hardhat

Why marketing and UX teams must join IT on cyber security

For far too long, cyber security has been considered the sole domain and concern of the IT department, with other departments including marketing, UX and design, firmly entrenched in the belief it is not their concern. The reality could not be further from the truth. In fact, this view is dangerous as it could lead to irreparable brand damage and a lack of trust in consumer behaviour.

Nicki Doble

CIO, Cover-More Group

Sign in