Pandemic bites fast food chain A&W out of Thailand

US fast food restaurant chain A&W, known for its signature waffle burgers, “aroma” fried chicken and draft root beer, is closing its doors in Thailand as two years of recurring Covid-19 restrictions and a general change in consumer behaviour brought about by the pandemic have led to spiraling losses for the brand’s local franchisee Global Consumer, or Glocon.

The doors of all 26 A&W restaurants will simultaneously close on March 20, ahead of the license expiration date on March 31, local media cited Glocon chief executive Nopporn Phatthararuchi as saying. Currently, Glocon is in the process of seeking approval from its board which is seen as a formality.

Sources say that the company has informed A&W staff in advance about the closure, with compensation paid in accordance with labour laws.

However, according to The Nation, there are three large food chains in talks with Glocon about a potential purchase of the A&W franchise in what could be a 500-million baht deal. No details have been made officially public, though.

Stuck in the red

According to Glocon’s last annual report, A&W outlets in Thailand suffered operating losses of more than 70 million baht ($2.21 million) in 2021 alone. Sales were less than 100 million baht ($3.02 million) last year, down from almost 200 million baht in 2018.

The company said that despite efforts to adopt new strategies to improve its bottom line, including selling its products through food trucks at petrol stations instead of in traditional restaurants and selling waffles at convenience stores to expand its customer base, losses kept accumulating as most A&W branches remained inside shopping malls, which were closed for long periods during the heights of the Covid-19 pandemic in Thailand.

The sharp decline in foreign tourist numbers due to closed borders added to the problem, and the most recent rise in costs of raw materials and energy as a result of the Russia-Ukraine war, has further exacerbated the firm’s woes.

The A&W brand for now keeps a presence in Southeast Asia in Singapore and Malaysia. The Philippine branches were already closed in 2004.



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US fast food restaurant chain A&W, known for its signature waffle burgers, “aroma” fried chicken and draft root beer, is closing its doors in Thailand as two years of recurring Covid-19 restrictions and a general change in consumer behaviour brought about by the pandemic have led to spiraling losses for the brand’s local franchisee Global Consumer, or Glocon. The doors of all 26 A&W restaurants will simultaneously close on March 20, ahead of the license expiration date on March 31, local media cited Glocon chief executive Nopporn Phatthararuchi as saying. Currently, Glocon is in the process of seeking approval from...

US fast food restaurant chain A&W, known for its signature waffle burgers, “aroma” fried chicken and draft root beer, is closing its doors in Thailand as two years of recurring Covid-19 restrictions and a general change in consumer behaviour brought about by the pandemic have led to spiraling losses for the brand’s local franchisee Global Consumer, or Glocon.

The doors of all 26 A&W restaurants will simultaneously close on March 20, ahead of the license expiration date on March 31, local media cited Glocon chief executive Nopporn Phatthararuchi as saying. Currently, Glocon is in the process of seeking approval from its board which is seen as a formality.

Sources say that the company has informed A&W staff in advance about the closure, with compensation paid in accordance with labour laws.

However, according to The Nation, there are three large food chains in talks with Glocon about a potential purchase of the A&W franchise in what could be a 500-million baht deal. No details have been made officially public, though.

Stuck in the red

According to Glocon’s last annual report, A&W outlets in Thailand suffered operating losses of more than 70 million baht ($2.21 million) in 2021 alone. Sales were less than 100 million baht ($3.02 million) last year, down from almost 200 million baht in 2018.

The company said that despite efforts to adopt new strategies to improve its bottom line, including selling its products through food trucks at petrol stations instead of in traditional restaurants and selling waffles at convenience stores to expand its customer base, losses kept accumulating as most A&W branches remained inside shopping malls, which were closed for long periods during the heights of the Covid-19 pandemic in Thailand.

The sharp decline in foreign tourist numbers due to closed borders added to the problem, and the most recent rise in costs of raw materials and energy as a result of the Russia-Ukraine war, has further exacerbated the firm’s woes.

The A&W brand for now keeps a presence in Southeast Asia in Singapore and Malaysia. The Philippine branches were already closed in 2004.



Support ASEAN news

Investvine has been a consistent voice in ASEAN news for more than a decade. From breaking news to exclusive interviews with key ASEAN leaders, we have brought you factual and engaging reports – the stories that matter, free of charge.

Like many news organisations, we are striving to survive in an age of reduced advertising and biased journalism. Our mission is to rise above today’s challenges and chart tomorrow’s world with clear, dependable reporting.

Support us now with a donation of your choosing. Your contribution will help us shine a light on important ASEAN stories, reach more people and lift the manifold voices of this dynamic, influential region.

 

 

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