BreadTalk braces for weaker economic growth in Singapore

It is reducing headcount to manage cost.

According to CIMB, Singapore (51.0%) and mainland China (32.0%) were the top geographical revenue generators for Breadtalk in FY12. 

The group expects slower economic growth in Singapore in FY13 as well as higher labour costs in the countries it operates in. With Singapore clamping down on the foreign worker supply, the group is reducing its headcount to manage its costs.

Here's more:

Breadtalk intends to increase the revenue contribution from mainland China to over 50% over the next few years by expanding into 3-5 new cities each year. 

According to Euromonitor, the retail value of baked goods in China increased from Rmb3.7bn in 2000 to Rmb7.8bn in 2010. In 2015, the value is estimated to be at Rmb11.1bn. The foreign bakery chains have been expanding rapidly in China to tap into this growth potential and Breadtalk plans to do so by penetrating into the second-tier cities.

2.3 Changing Chinese habits
The rising demand for baked goods in China can be traced to the increasing urban sprawl and the influence of Western habits on the Chinese city dwellers. 

The city folks are increasingly likely to have bread for breakfast rather than just the traditional Chinese fare.

The middle class is increasingly likely to eat out, given the surge in disposable per capita income over the past decade. According to the China Market Research Group, incomes have quadrupled from US$760 in 2000 to US$3,000 in 2010.

This, coupled with the hectic city life that leaves little time for cooking, has led many urban Chinese to opt for baked goods for their meals.

Apart from this, Breadtalk’s stores employ an open kitchen concept which appeals to the Chinese customers who are concerned about hygiene given the recent food scares.