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Can someone explain to me what the rationale is for a global business here. I struggle to understand how there are any synergies for a global business over a series of local/regional ones.
This is not a brand business, nobody goes to upper crust etc, unless forced to because they are trapped in a travel terminus. So not like mcdonalds or burgerking etc that have supply & logistics synergies from 1000’s of stores in any one country.
Is the global ambition here nothing but an egotistical quest for turnover with no basis for competitive advantage ?
You answered your own question but here you are
https://www.foodtravelexperts.com/investors/why-invest/
Well down 6 to 7% but a huge amount of the volume is buying...the smart money and maybe shorts closing??
No. Still don’t see it.
What is the argument for doing this globally ? I can’t see any supply & distribution benefits over a national company. ‘Upper Crust’ is a meaningless brand for a traveller from the far east say visiting a UK airport. Flowery words are one thing, delivering something cost effectively in Beijing, Heathrow, Atlanta & Birmingham Rail station better than a national chain - how EXACTLY is that possible ?
Graviton
You seem overly concerned. Are you currently a holder or a prospective one?
1. Economies of Scale
Even though SSP Group operates various brands that might not have the same level of recognition as McDonald's or Burger King, their global operations allow them to benefit from economies of scale. This includes:
Purchasing Power: Bulk purchasing of food and other supplies can reduce costs.
Centralized Functions: Shared services like IT, HR, marketing, and finance can be centralized, reducing redundancy and costs.
2. Operational Efficiency
Operating globally allows SSP Group to standardize processes and best practices across different markets. This can lead to:
Improved Training Programs: Standardized training across all locations ensures a consistent quality of service.
Streamlined Operations: Efficient logistics and supply chain management can be achieved through centralized planning and execution.
3. Risk Diversification
A global presence diversifies risk across various markets. If one region experiences economic downturns, political instability, or other issues, the impact on the overall business is mitigated by stable performance in other regions.
4. Strategic Partnerships
SSP Group often partners with airports, railway stations, and other travel hubs worldwide. Being a global operator:
Enhances Negotiating Power: A global footprint makes SSP Group a more attractive partner for large international travel hubs, leading to better contract terms.
Leverages Relationships: Long-term relationships with global travel infrastructure companies can lead to more favorable and exclusive agreements.
5. Brand Portfolio Management
While SSP's brands might not have the same individual recognition as fast-food giants, the company benefits from a portfolio of well-known travel brands tailored to local preferences. This includes:
Localization of Brands: Adapting international brands to local tastes can make them more appealing to travelers.
Flexibility in Brand Deployment: SSP can introduce or retire brands as needed based on performance and regional preferences.
6. Market Knowledge and Innovation
Operating in multiple countries allows SSP Group to gather diverse market insights and innovations that can be shared and implemented across different regions:
Best Practices Sharing: Innovations in one region can be tested and, if successful, rolled out globally.
Cross-Pollination: Ideas and successful strategies can be transferred between markets, driving overall growth and improvement.
7. Global Trends and Consumer Behavior
Understanding global travel patterns and consumer behavior helps SSP Group in:
Strategic Planning: Making informed decisions about where to open new outlets or which brands to expand.
Adapting to Trends: Quickly adapting to global trends in food and beverage preferences, enhancing their appeal to travelers.
This is money blaming the Europpean rail strikes and if tht is the case then this too will pass.
Im a holder, but dismayed that the management is continuing to look at growth through acquisition, at the same time as having to update existing premises with borrowing still high, and margin has fallen, from an already unacceptably low level
I am retired from a ftse 250 consumer goods company. It has found that localisation (focus on local brands) carries with it high marketing costs, a lack of economies of scale linked to Purchasing and production, HR, financial and IT systems. Economies come from regionalisation. So acquisitions must extend existing regions and fit into them, not willy-nilly across the world.
Senior management's focus now should be on improving the existing portfolio of eateries, improved menus and higher prices and margins. Reducing debt should come before tiny dividends, an increased share price before chasing higher sales volumes through acquisition. It's about senior management focus on regional meals and brands to allow some economies of scale, to reduce costs and increase margins ---or should be. get rid of complexity, don't create more.
They seem a confident group of directors, they strongly believe in the company and I do trust their judgement on the decisions made to grow the business abroad.
Some director share top ups would surely help the SP a bit now and give support....they had decent
They seem a confident group of directors, they strongly believe in the company and I do trust their judgement on the decisions made to grow the business abroad.
Some director share top ups would surely help the SP a bit now and give support....they had decent amounts at higher prices.
300p price target from Morgan Stanley this morning, overweight...
As pointed out it on a food cost margin they are unlikely to be able to beat an in country supplier (though travel hub stores are busy so they will get close) what has been missed is the following.
-Limited risk of choosing SSP as the supplier/tenant.
-Numerous brands available so will be able to operate multiple units on one site with lower overhead costs/labour saving which mitigates the slightly lower food margin.
-They know how to operate high volume stores/all day part offers.
-They know the sales/margins and can offer, more money to the landlords and hence win more business - Vagabond went bust due to lower sales than expected at Gatwick....
Fair bit of stock changing hands, both yesterday and so far today....interesting....
Suspect corporate action is happening so unable
Relist in USA or full takeover
Classic dump to try and get glg out occurring