GPI at last starting to douse the grease fire in its kitchen
Food division, which includes Dunkin' and Burger King, has incurred staggering losses over the past three years
Cape-based empowerment group Grand Parade Investments (GPI) has been through a horrid time. It recently appointed its fourth CEO in three years, it got into a public spat with some of its shareholders, and its food division has incurred staggering losses.
Even so, things could actually be improving. The closure of its cash-draining Dunkin’ and Baskin-Robbins outlets, which have cumulatively incurred R96m in losses in SA since 2016, would free its other brands such as Burger King. The appointment of former SABMiller executive Mark Bowman and former Spur financial director Ronel van Dijk to its board (after considerable shareholder pressure) provides it with much needed skills in the food and beverage markets.
GPI also made some progress in turning around the performance of its Burger King fast-food franchise operation. It plans to shut down underperforming outlets, and says it has learnt from its initial mistakes. All the stores it opened over the 18 months are operating profitably.
GPI still has a long way to go but it should be commended for at least starting an operational cleanout. Even so, it’s time for the group to mend its relations with its disgruntled shareholders. GPI’s leadership has to acknowledge they have some good ideas, such as their push to have Bowman and van Dijk appointed to its board.
It should follow the example of former Pepsico CEO Indra Nooyi, who responded well to pressure from an activist shareholder between 2012 and 2016. She said she saw it as “painful, but free consulting”.