July 2023 results

Antoine & Vadim, the two founders of Kosteau Food.

Last month, we reported a decrease in revenue during the summer period, and this observation still holds true for the month of July. This trend can be easily explained: summer, with its warm and sunny weather, is exerting its influence. As anticipated, our revenues have experienced a decline during this time, which is understandable as consumers opt to prioritize outdoor dining rather than placing delivery orders.

We have noticed that street food consumption generally decreases during the summer season. The high temperatures encourage individuals to opt for fresher options like salads, avoiding fried foods and heavily loaded cheese naans.

Interestingly, and for the first time since our inception, we are also observing a reduction in click-and-collect revenue.

As an example, let's take a closer look at the sales of menu items that include fries, which serves as a particularly revealing indicator of our customers' seasonal preference.

We are observing that customers are gravitating towards a "lighter" consumption approach. The volume of orders has increased, yet the overall revenue has decreased, indicating a decline in the average order value.

Customers are ordering fewer add-ons, fewer sauces, etc.

As you are already aware, we have established a monthly tradition: the launch of new limited-edition recipes. This strategy has proven to be extremely effective and fruitful. We won't delve into the specifics in this article. If you'd like to learn more, we invite you to refer to our previous articles.

Capturing the evident trend towards lighter consumption, this month we unveiled two enticing novelties offered in Cheese Naans as well as in composed Salads.

- **"INDIANAPOULOS"** (a creation presented by the NBK franchise): an innovative cold cheese naan, enhanced with our Indian chicken marinade and a subtly lemony and minty homemade mayonnaise.

- **"MEXICO"**: featuring a chicken marinade with Mexican spices, grilled red peppers, and a generous serving of guacamole.

Once again, these ephemeral culinary creations have proven to be a commercial success, with a total of 240 sales for the Cheese Naan version, combining both recipes. However, the salad version recorded only 19 sales in total, for both recipes combined.

In conclusion, our customers visit us for our delicious naans and not for our salads. This reaffirms the undeniable popularity of our flagship products.

Last month, we had mentioned our intention to reconsider our location in Grenoble. Indeed, we have recognized a significant potential for online pickup and counter sales, and we are gradually starting to contemplate a shift in our business model. This transition would entail establishing outlets more suited to takeout and online pickup orders, rather than focusing primarily on delivery.

Currently in Grenoble, our revenue distribution is as follows: 80% comes from our delivery services, while the remaining 20% is generated by takeout orders and online pickup. However, we are facing a major challenge when it comes to our profit margins in the delivery sector. The high commissions imposed by platforms like Uber and Deliveroo have a significant impact on our profit margins. Additionally, we hadn't anticipated such high marketing expenses, which exacerbate the situation by driving up the commissions even further.

Our belief in the potential of delivery as a mode of consumption remains strong. However, our goal is to decrease the dominant share it holds in our overall revenue. Therefore, we are planning to expand our network towards outlets where balance would be achieved: 50% of the revenue generated by direct sales (click and collect, takeout, or dine-in), and the remaining 50% through delivery. This approach would allow us to better balance our margins and mitigate the impact of high commissions, while also providing our customers with more choices in terms of ordering methods.

We are thrilled to announce the acquisition of a space right in the heart of downtown Grenoble, in the Championnet district. This location aligns perfectly with our new aspirations. Starting from September, we will have the pleasure of welcoming you to this new establishment that will allow us to materialize our new model. We are eager to implement these changes and to continue serving our customers in the best way possible.

We will provide you with more updates about this new outlet in the article for the month of August.