Bon appétit returns to the black

Turnover fell by 2.6 to SF3.01 billion as a result of the disposals of the Gourmet Factory unit (a 'shop-in-shop' concept located in the Jelmoli department store in Zurich, combining food retail and restaurant facilities) in January.

Retail sales were also affected by the decision of the group's Usego unit to outsource fruit and vegetable deliveries to wholesalers and a reduction in deliveries to the EPA department store chain since its acquisition by another retail group, Coop Suisse, in 2002.

But a shift in buying patterns by recession-hit Swiss shoppers - in particular a trend towards food discount chains such as Bon appétit's Pick Pay, Magro and Lekkerland fascias - helped limit the sales decline to just 2.6 per cent.

But if sales dipped, Bon appétit's performance was much better at the operating level, with profits rising by 17.2 per cent to SF58.6 million as a result of the various restructuring measures undertaken during 2003. These include the disposals, but also moves to streamline the company's supply chain, such as merging the Frimago and Usego wholesale units.

Results from the first few weeks of the current year suggest that the discount phenomenon is unlikely to disappear, with Pick Pay's sales some 8 per cent higher than the same period a year earlier. The convenience store business - where Bon appétit supplies retailers trading under the Primo banner - also appears to have recovered slightly from the previous year, although sales were flat.

These two business units will be the focus of Bon appétit's investments this year, with an expansion of the number of own label products available at the Pick Pay chain (which is rare among discounters in stocking mainly branded goods), a rationalisation of the product portfolio and a more aggressive pricing policy coupled with an in-store makeover. As for the Primo unit, Bon appétit said it planned to work more closely with its independent store partners, in particular with regard to reducing prices.