Restructuring ends TGI Friday's long profit drought

The US-style restaurant chain TGI Friday's (Taiwan) Inc reported profits in the first quarter following eight straight years of losses, after the chain started corporate restructuring measures, a company official said.

Karen Lee (李靜惠), TGI Friday's marketing manager, confirmed a Chinese-language newspaper report yesterday that said the company saw an increase of 20 percent in first-quarter sales compared with the same period last year.

The report gave no sales figure for the first quarter and Lee refused to provide any.

Introduced into Taiwan in 1991, TGI Friday's now has 10 outlets around the nation and has become the biggest US-style casual-dining chain. It once stood out with what at the time was considered to be fashionable decor and Western recipes directly imported from the US.

But from 1995, its profits declined due to a rapid growth in new outlets and challenges from competitors. After its operation changed hands several times, the US-based Carlson Restaurant Worldwide decided to take over in the third quarter last year.

Carlson then started to streamline manpower, re-structure logistics supporting systems and introduce a "coach" system which has helped reduce staff turnover, according to senior vice general manager Brett Lin (林昱宏).

Taiwanese like to eat out and the market has lured several restaurant chains such as Tasty (西堤) and Swensen's Co to seek a bigger market share. According to Ministry of Economic Affairs statistics, the nation's restaurant sector generated NT$24.7 billion in sales in January, up 10.53 percent from the previous month.

A company official at steakhouse Tasty said that "localization" of the food taste and a fair price are key to a restaurant chain's success.

"Although we offer Western cuisine, everything -- from the restaurant's decor and atmosphere, the service quality, to the taste -- is adapted in a Taiwanese style. We make customers feel comfortable," said Lobo Lee (李森斌), general manager of Wang Group (王品集團) which has opened 14 Tasty outlets nationwide over the past three years.

Wang Group runs 35 steakhouses around the nation under the high-priced Wang Steaks (王品台塑牛排), as well as the average-priced Tasty and Tao Ban House (陶板屋) brands.

With a surge of six new outlets last year, Lee said the company will not set up new shop this year and instead will focus on internal management to maintain its business performance.

"This is still a potential market, but finding one's niche and adopting the right strategies to target customers is be the key," Lee said.

An official with Swensen's, which introduced Swensen's into Taiwan 20 years ago and three other brands later, said some changes are essential for popular-styled eateries.

"Different from the high-priced Ruth's Chris Steakhouse, Swensen's has been developed into a hot place for family gatherings. Therefore, we offer some self-invented recipes, like Japanese-style curry rice [in Swensen's], to better cater to local tastes," said the marketing manager Yasmin Chou (周雅敏).