Is a Well-Known Coffee Chain Enjoying a Resurgence in Mississauga?
Although it might feel like there's been nothing but bad news in the retail (and to a lesser degree, the foodservice) world, sometimes glimmers of hope emerge to remind us that embattled brands can reverse their fortunes.
As you might recall, well-known homegrown coffee chain Second Cup has been in the news for its lacklustre performance. Late last year, news broke that the brand—which had been working hard to revamp and rejuvenate its image to better compete with other gourmet cafes—was looking to "review its strategic options" in the face of falling revenues.
In November 2016, the brand announced that it had secured a sizeable loan to help repay debt and cover other expenses.
Now, it appears that the brand is actually enjoying a rise in sales.
According to a recent news release, Second Cup enjoyed "continued improvement of financial results for the second quarter ended July 1, 2017." The chain reportedly experienced a 0.7 per cent increase in same-store sales and managed to reduce its losses to $315,00 (or two cents per share) from $441,000 (three cents per share) in the same period last year.
The company also said it will be debt-free, pending completion of a debt exchange transaction.
Second Cup actually experienced its first positive quarter since the fourth quarter of 2015.
“I am pleased with our continued improvement in profitability. Our recently launched premium Flash Cold Brew and Better For You products were strong contributors to our sales this quarter.” said Garry Macdonald, appointed interim CEO. “We are focused on driving our same store sales momentum with further innovation including the introduction of Pinkberry frozen yogurt currently being tested in cafes."
The cafe has managed to re-pique consumer interest, it seems, by branching out and welcoming Pinkberry frozen yogurt to select locations.
“We have designated one of our downtown Toronto cafes as an innovation centre for testing new ideas. In recent weeks, sales at this cafe have increased more than 20 per cent with even greater increases in profitability," Macdonald said. "While this is only one cafe, I am very encouraged by consumer response to our new ideas. We plan to rapidly introduce successful initiatives into additional cafes.”
Second Cup also said the timing of Canada Day had a positive impact of about 0.3 per cent. The company also credits its rising sales to the aforementioned Better For You (a line of more nutritious drinks and snacks) menu and newly launched Flash Cold Brew.
Since healthy snacks and cold brews are trending hard, it makes sense that they're drawing customers into stores.
It'll be interesting to see what happens to the brand going forward.
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