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Gold/Mining/Energy : Canadian REITS, Trusts & Dividend Stocks -- Ignore unavailable to you. Want to Upgrade?

To: bill who wrote (3564)	6/25/2002 4:26:35 PM
From: russet	Read Replies (2) \| Respond to of 11633

A&W's : The food court locations of burger joints can approach and greatly exceed the sales of the average free standing structures,...it all depends on the mall. "A" malls like Yorkdale, Scarborough Town, Eaton Center in Toronto etc., can generate food court sales easily exceeding the average free standing structure,..."B" malls will normally be closer to two thirds the average free standing structures, and "C" malls may go down to a third. It is all market dependent and can vary greatly. The rents, common area, mall adfund, etc., costs to lease the food court spaces may be as high as the costs in a free standing unit depending on the area needed in an "A" mall, but then many other costs such as labor, heating, cleaning, etc.,..can be substantially less than in free standing structures, as you only have a small kitchen to deal with. "B" malls and "C" malls will charge much less in their leases than "A" malls making it difficult to determine which mall generates the best profits for the mall based food unit. The problem for A&W in the mall and other high traffic locations (airports, theatres, highrises, hospitals, universities etc) which have been very lucrative for A&W in past years, is that their competitors want in, and as the old 10 + year leases come up for renewal, the big malls will not continue to give A&W hamburger exclusivity clauses in the leases. The sales of A&W's in these malls could be subjected to severe head on competition as the malls allow direct burger competitors into the food courts and adjacent mall spaces. A&W may hope to expand into free standing structures in Eastern Canadian areas such as Ontario where they have few free standing stores, but competition is fierce as most areas are saturated in hamburger, pizza, sub etc., competition. I also find it hard to believe that Chubby chicken can make a substantial dent in KFC's business. I too would question the ability of A&W to significantly grow their sales without reinventing themselves. Wendy's/Timmies, McD's and Burger King are all upgrading their current images, and look to me like they may be about to heat up the burger wars again, foregoing profits to go for market share. If I wanted a burger, a few minutes drive in most markets will allow a person to determine which one of the big 5 burger chains had the best burger deal,...discounts are plentiful. More often than not I can find a pizza, sub, taco, or "all you can eat pigout deal" that will be a lot more filling and cheaper, and probably include the drink.