CLOSING: Chain to shut Coffs restaurant to protect revenue
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This story was originally published on March 3rd.
THEY are situated less than one kilometre apart in Coffs Harbour, designed to capture both north and southbound traffic on the Pacific Highway.
But convenience restaurant company Oliver's says its ploy of operating two restaurants so close to each other in Coffs Harbour has actually backfired after just a year of trading.
It's company directors have decided to close the Coffs Harbour Southbound store, which it opened in the new $15-million service station complex off Stadium Drive in March last year.
It has found the new restaurant has actually 'cannibalised' trade at the company's existing northbound store in Kiddell Place in the South Coffs service station, less than 1km up the road.
The soutbound store's closure will be effective from April 20, the company said in a statement to the Australian Stock Exchange.
"A determination has been reached that this (new) store is not only underperforming due to significant challenges with the site, but it has also cannibalised the northbound store at Coffs Harbour, negatively impacting the trading performance of the northbound store, which had been trading profitably prior to the opening of the southbound store," the company said.
"We expect this decision will result in an increased profit contribution from the remaining Coffs Harbour store.
Marketed as a healthier option to traditional fast food outlets, Oliver's explained to the ASX how the recent bushfires on the East Coast had impacted trade.
Revenue dropped by 1.7% to $17.94-million and the company says nationally it appears sales would have grown if it weren't for the fire disaster that ravaged NSW and Queensland last year.
Oliver's Real Food owns more than 20 stores stretching from Maryborough to the Gold Coast, Sydney to Melbourne with majority of its holdings in regional Australia.
"The board and management feel compelled to acknowledge the fantastic performance of the store operations and supply chain teams in this difficult and challenging trading period," said Oliver's founder Jason Gunn, who has returned to the business.
"The dramatic improvement in operating performance in these challenging times is testament to the strong heart of the brand, the management, and the people that work in this business.
"The board and management look forward to moving beyond the remaining legacy issues from the past and producing a continuing increase in the companies profits and performance, the beginning of which has been demonstrated over the last half under challenging conditions," the company told the ASX.