Your local Michels isn't the only one that closed. Across the...

Your local Michels isn't the only one that closed. Across the group outlet numbers continue to decline quite rapidly. Probably more worrying than the decline is the fact that there are no new domestic locations being opened. I wonder if part of the cost cutting they undertook was to get rid of all their sales team.



Other points of note is that they talk about how Brumby's bakeries and Pizza division have benefited from Covid yet this translated into 1.2% and 0.2% increases in SSS respectively. I wouldn't consider this good as this isn't even enough to cover inflation and would mean franchisees are going backwards. By comparison Dominoes SSS for Australia were 5.1%.

The balance sheet has been repaired so they have bought themselves the time but really if they want to survive and thrive long term then I feel 3 things need to be achieved;

1) New stores need to start opening. Yes with Covid it is hard but that hasn't stopped Dominoes from opening new stores locally this year. (https://investors.dominos.com.au/stores)
2) The rate of closures needs to slow down, remember when they did an audit and found 400 stores were nonviable. Well that was about 800 stores more ago. This isn't just Covid either since the rate of decline predates it.
3) Same store sales need to grow at a survivable rate. 0.2% for Crust which should be benefiting is not going to create sustainable businesses. They need to be targetting 2-3% at least to stop franchisees from going backwards.

Accomplishing #3 will probably go a long way towards making #1 & #2 happen as well. Time will tell.