December pizza sales boost Taste

Johannesburg - Taste Holdings said on Monday that its Food Division, comprising Scooters Pizza and Maxi's Restaurants, saw system-wide sales (which include new stores) increase 6.0% over December 2009, with Maxi's increasing system sales by 9.9% and Scooters Pizza by 2.3%.

Same store sales in Scooters Pizza increased 2.0%, despite a decrease in spend per transaction of 3.7%. This decrease was due largely to the strategic price reduction implemented in March 2009 to focus on gaining market share through transactional increases and retaining the strong value positioning of the brand.

Taste said it was releasing a trading update given the significant contribution that December trade makes to the group's financial performance for the year.

Same store sales in Maxi's declined by 1.4%, largely due to the lower spending in the large shopping malls and as a result of the holiday period starting one week later than in December 2008.

Spend per transaction declined by 1.3%, due to the introduction of a lower special price point in December 2009 against the previous December.

The debtors' book - consisting predominantly of franchisee royalties - remained unchanged over the previous year.

Overall, these results were largely in line with expectations taking into account the higher base in December 2008 and the continued reduced consumer spending during 2009.

In the group's Jewellery Division, comprising NWJ, system-wide sales increased 7.0% while same store sales increased 2.5% over December 2008, despite an approximate 17% decline in spend per transaction as consumers continued the year-long trend of buying lower-ticket items in this category.

The number of promotional days in December 2009 was the same as in December 2008. The traditional extended credit terms granted to franchisees for stock purchases during November and December have been settled in full resulting in an improved debtor's book over the previous year. Overall, the sales-related results were better than expected, especially the increase in sales in the face of the expected decline in spend per transaction.

The group anticipates that consumers will continue their restrained spending patterns of the last year, and that the brands will continue to be well positioned by offering strong value for money offerings.

- I-Net Bridge