Coffee Club doing well despite closures: CEO
THE boss of the Coffee Club has insisted the chain is performing well, despite a number of store closures.
Nick Bryden took over as CEO of Minor DKL - the owner of the Coffee Club brand - 18 months ago and said sales had flatlined at that time.
He immediately set about reinvigorating the business, surveying existing and lapsed customers to develop a strategy to revive sales in a highly competitive market.
"We looked at what customers were saying … and we needed to work on making the brand relevant, distinct and rewarding which is value for the experience," Mr Bryden said.
"I wouldn't say we were asleep at the wheel but it is a competitive world and you have to embrace change and that includes deliveries.
"We've started to get really good sales growth and the customer experience has really improved and the sense of our value is really good."
Mr Bryden did not specify how many stores had opened and closed this year, but outlet numbers remained around 300.
He said a lack of foot traffic and higher rents were reasons behind at least three of the closures, but it was not a trend across the entire brand.
"We've closed a few and we've opened, broadly, the same number in 2019 and what we have been doing over the last 18 months is setting up a transformation for future growth," he said.
"In the case of those three sites (Nundah Village, Sherwood, Hamilton), we did not feel it was worth renewing the leases based on how the stores were performing
"Our strategy is to find sites that are profitable to franchisees."
He said Coffee Club was value for money despite a recent survey showing its brews were equally the most expensive to purchase at a major Westfield shopping centre.
Consumers need to be aware that price was also reflective of quality of service and the beans, he said.
"We look very carefully at pricing and look at what it takes to source great quality coffee, to pay people, including farmers, correctly and the price we are putting coffee out is a fair reflection of that and quality and experience we provide," he said.
Even though Mr Bryden said they paid their workers correctly, the brand has not escaped being prosecuted by the Fair Work Ombudsman.
Three franchisees in the past few years have incurred the wrath of the watchdog including Coffee Blacktown which last month was forced to back-pay a casual waitress $36,745.
Other incidents include a franchise at Westfield Geelong shopping centre allegedly underpaying two workers and providing false and misleading pay slips and more than $180,000 in penalties against a former Coffee Club cafe franchisee in Brisbane.
"We don't accept it and we have a zero-tolerance policy," Mr Bryden said.
"Where we find it has occurred … we make sure it is fully addressed and we have actually removed all of those franchisees from the system.
"It's a standing policy to remove them from the system."