Taste Holdings first-half loss widens

Taste Holdings, a South African retail group, reported its first-half financial results, revealing a gloomy outlook for the next six months. The company remains pessimistic about a significant sales recovery and is committed to investing in marketing efforts and enhancing customer value propositions. Taste disclosed that its revenue plummeted by 9% to R483 million, while operating profit took a nosedive to R73 million from a loss of R41 million. Moreover, the loss attributable to equity holders widened to R66 million from a loss of R34 million in the previous year. Carlo Gonzaga, CEO of Taste Holdings, appeared on CNBC Africa to delve into the financial figures and discuss the company's strategic direction moving forward. Gonzaga acknowledged the challenges faced by the business, particularly in the low-income segment where brands catering to budget-conscious consumers have experienced significant downturns in sales. Despite the tough market conditions, Taste Holdings is focused on maintaining brand strength and offering value to customers in an effort to weather the storm. Regarding the performance of starbacks, one of Taste Holdings' flagship brands, Gonzaga expressed a positive outlook. The CEO highlighted that starbacks and Domino's Pizza, another key brand under the company's portfolio, have been performing in line with expectations. Gonzaga noted that while foot traffic in malls has declined, the new stores of starbacks continue to surpass the company's profit targets, showcasing operational efficiency and cost management. Gonzaga emphasized the importance of enhancing the customer experience at starbacks through initiatives such as digital ordering platforms and creating a unique ambiance in-store. He defended the company's cautious approach to store expansion, citing the focus on delivering a premium customer experience over rapid growth. Gonzaga revealed plans to accelerate store openings in the coming years, with four new stores slated for launch by the end of the current year. Looking ahead to 2018, Gonzaga outlined the company's strategy for growth and debt restructuring. Taste Holdings aims to address its debt burden and streamline its operations to support future expansion. The CEO expressed confidence in the profitability of the food business but emphasized the need to optimize the company's financial structure. Gonzaga projected reaching cash break-even point in the latter half of next year, contingent on stabilizing consumer sentiment and successful execution of the growth plan. Despite the challenging economic environment and tough competition in the retail sector, Taste Holdings is determined to navigate through the headwinds and emerge stronger. The company's focus on brand resilience, customer value, and operational efficiency will be crucial in driving its recovery and eventual profitability.