Singaporeans love food and Japanese food is probably one of our favourite cuisines. Aside from professing my love for ramen, I’m always ready for a meal of sushi. Whether it’s cheap takeaway sushi sets to fine dining omakase, there’s a sushi for everyone at every price point.
Recently, Kuriya Japanese Market opened at Guoco Tower, right at the Tanjong Pagar MRT exit. This was music to my ears and bliss to my tummy as I can now take away affordable and delicious sushi sets on my way to and from office. There are few things better than rewarding myself with sushi after a day of work.
If you enjoy the sushi at Kuriya Japanese Market, you may be surprised that they belong to the same company as Ichiban Sushi and Ichiban Boshi – RE&S Holdings Limited (SGX: 1G1). RE&S Holdings also owns Kuriya Dining which is a fine dining restaurant offering Japanese omakase.
Established since 1988, RE&S Holdings was listed on the SGX Catalist board on 22 November 2017. RE&S owns and operates multi-concept F&B outlets in Singapore and Malaysia, focusing on authentic Japanese cuisine and dining experiences. As of June 2021, they have a total of 76 outlets in Singapore, covering fine dining (Kuriya Dining), full service family restaurants (Ichiban Boshi) and quick service restaurants (Ichiban Bento). They have also been expanding their quick service restaurant offerings to various specialty areas of Japanese cuisine, including Yakiniku-GO which was launched in 2021.
While the F&B sector has been hard hit by the pandemic, RE&S has managed regain profitability in FY2021 in part due to their quick response to the pandemic, quickly onboarding food delivery platforms during Circuit Breaker, to coming up with new dining concepts like Yakiniku-GO and leveraging on their expertise to tap on growing demand for ready meals.
If you are interested in Japanese food and investing in the F&B sector, here are 5 things to know about RE&S’s business.
Describe RE&S’s financial performance over the past few years.
FY2021 saw a turnaround in the Group’s performance with a $10.9m profit before tax. This represents an 8.8% Net Profit Before Tax (NPBT) margin, which contrasts with the -5.1% in FY2020, and the 3.8% in FY2019. FY2020 was particularly challenging for the Group as the year was impacted by major store renovations and COVID-19.
While footfall to our outlets in FY2021 continued to be affected by the pandemic measures, the Group’s swift onboarding of multiple brands to major delivery platforms led to an increase in delivery sales. In addition, the Group’s continued strategy to expand its presence in the Quick Service Restaurant, Convenience and Others (QSR) segment yielded positive results with improved profitability.
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How has COVID-19 affected RE&S operating conditions and what measures have been put in place to mitigate the impact?
Group size limitations and work-from-home arrangements have impacted traffic to our restaurants significantly, with outlets in CBD and office areas remaining more affected. When dine-in was prohibited, we had to pivot quickly to delivery and takeaway business only. On the labour front, manpower shortages were exacerbated as a result of COVID-19 related travel restrictions.
At RE&S, contactless ordering and eQueue systems was introduced for greater ease of mind. We exercised prudent cost controls and quickly adjusted our business to adapt to the new norm. Besides immediate measures such as increasing our brands’ visibility on the major delivery platforms, we also explored midterm plans including the creation of new concepts such as Yakiniku-GO that emphasizes on affordability and is less labour-intensive. Our goal is not just to tide over the pandemic, but to emerge stronger and more resilient.
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Understanding your customers is one of the best ways to retain and build business. What are some things RE&S has learned about its customers changing needs in a post-pandemic world?
COVID-19 has transformed the way we live and work, and accelerated changes in consumer habits and behaviours. For the F&B industry, that has translated to greater ease of online ordering, higher acceptance of delivery food and growing demand for convenience foods and ready meals. Re-thinking the customer journey and re-evaluating the customer experience will allow us to stay relevant and continue engaging our customers.
What are some of the risks for the business and how do you manage them?
Two significant risks for our business relate to Food Safety and Supply Chain. To mitigate the first, we established food safety operating standards based on SS590 and ISO22000 Food Safety Management System. Training on basic food hygiene is provided to staff, and cleanliness of production floor, kitchens and outlets are maintained at all times. Bacterial testing for food products is carried out by in-house Quality Assurance or accredited third party laboratories. Regular checks are conducted to ensure that equipment such as chillers and freezers are well maintained and fully-functioning at all times. Expiry dates of ingredients are also monitored very closely.
To manage Supply Chain risks, alternative ingredients are identified, and several suppliers are maintained for the major category ingredients. Procedures are put in place to ensure sufficient stock is held in warehouses in order to prevent out-of-stock situations. In addition, supplier evaluation is performed on a yearly basis.
Sustainability and ESG have increasingly been a key focus, how is the Group committed to sustainability?
Management understands that focusing solely on financial performance is not sufficient to achieve a sustainable business in the long-term. The Group is committed to work closely with its stakeholders to better understand their concerns and ensure that their interests are protected.
We ensure that the core values of our business partners are aligned with ours in terms of integrity, accountability, and environmental protection before any contractual appointments are made. To ensure accountability and transparency in carrying out our business activities and sustainability efforts, we maintain a system of effective compliance and governance regimes. Conscious efforts are made to engage our stakeholders (including customers, employees, investors, the government) through formal and informal channels to communicate the Group’s sustainability efforts and to solicit feedback.
Likewise, the Group continually seeks ways to reduce the environmental impact of our products and services whilst maintaining the highest level of quality. Since September 2018, one of our brands, Gokoku Japanese Bakery, had initiated a Bring Your Own Bag (BYOB) scheme in which a $0.10 off total bill discount is given to customers who bring their own bags. The launch of our CRM system in 2020 also allowed us to reduce paper usage as physical vouchers and loyalty cards were replaced by its digital counterparts.
Editor’s Note: Some answers for this article were extracted from the SGX 10 in 10 series published on 2 November 2021 and have been republished with permission. You can read more on the SGX website.
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