Mr. Pizza "Making 2021 the First Year of Profit"

[Asia Economy Reporter Hyunseok Yoo] MP Group's newly appointed chairman, Yang Hee-kwon of Pelicana, stated on the 27th, "We will make 2021 the first year of profitability and maximize shareholder value."

Chairman Yang presented four major management principles: efficiency, coexistence, transparency, and trust. He believes that by eliminating excess and injecting efficiency into MP Group's corporate management, the company can regain its former prestige. Coexistence means that the headquarters and franchise stores thrive together. Yang said, "Once the reconstruction plan currently underway is fully implemented, we expect MP Group's sales and profits to grow in tandem with franchise stores starting next year."

Regarding transparency, he explained that transparent management at headquarters is essential for franchise stores to make efforts together. He also emphasized that in the food business, consistent taste and quality are crucial to gaining consumer trust.

The management goal for next year is to increase sales by about 30% compared to this year through large-scale investments and efficient restructuring. Improving profitability is also an important task. Since losses have continued, Chairman Yang plans to treat 2021 as the first year of profitability and devote more than half of his week to working at MP Group, investing his time and passion.

Chairman Yang will first push for improvements in the high-cost, inefficient structure. The first step is to improve delivery and logistics efficiency. Currently, MP Group lacks regional logistics hubs. Since food ingredients are supplied nationwide from a central logistics center, logistics and delivery costs reach as high as 7%. The company plans to reduce excess in logistics and delivery by utilizing Pelicana's 12 logistics hubs. They are also considering relocating the headquarters due to the high annual rent. The company expects that moving the Bangbae-dong headquarters to Pelicana's headquarters space could save over 1 billion KRW annually.

Coexistence with franchise stores is also a key management issue. The philosophy gained from managing Pelicana for 40 years is that the profits of franchise stores, overall headquarters revenue, taxes, and social contributions must be harmoniously balanced. To promote coexistence, the company is considering significantly strengthening support for franchise stores. The goal is to reduce franchise costs and increase profits. To this end, they are exploring ways to lessen the burden of franchise fees, advertising costs, and royalties, as well as monetizing leftover supplies.

For external growth, they are also targeting the expansion of small-scale delivery-focused franchise stores, of course within limits that do not infringe on existing franchise stores' business rights. Chairman Yang believes that to win back departing customers, it is necessary to improve accessibility for local consumers. Since pizza is a delivery-based business, they plan to combine the delivery know-how accumulated over 40 years in the chicken business to expand franchise stores nationwide. They will also promote franchise store interior renovations to improve the brand image.

As a food business, taste and quality are the top priorities. They plan to expand talent recruitment to develop various menus that capture the tastes of consumers sensitive to trends and changes. They also intend to enforce strict quality standards. Chairman Yang emphasized, "If you cut food ingredient costs because it's difficult, both taste and quality will be ruined. Consumers will notice immediately."

Pizza and chicken are representative dining-out menus. Since they are also popular among foreigners, there is potential as K-Food. With the brand image of "Korea" greatly enhanced by BTS and K-quarantine, Chairman Yang plans to discover a new K-Food model combining pizza, chicken, and delivery services and aims to enter the U.S., Chinese, and European markets. Just as Pelicana developed the first seasoned chicken menu domestically in the past, Chairman Yang has ambitions to undertake new initiatives that could be described as a "second founding."