Florida-based fine-dining restaurant
Ruth's Hospitality Group Inc.
has recently forged a deal with Ko China Hospitality Limited to
expand its footprint in one of the most dynamic markets in the
world -- China. Per the agreement, both will open four new Ruth's
Chris Steak House units in China over the next three years. The
terms of the deal were not disclosed.
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Ko China Hospitality Limited is a subsidiary of Hasmore
Limited. Hasmore shares a longstanding relationship with
Ruth's and has helped grow the latter's presence in Asia's key
markets like Japan, Hong Kong, Taiwan and Singapore. Now
the duo is set to explore the Chinese market by the end of this
The new units are slated to open at Shanghai and Beijing - places
that are known for upscale dining. We believe that this move will
be strategically positive for the company on the entry level.
However, the Chinese market is not free from competition.
Following the growing demand for American dining brands, several
U.S. restaurateurs like
Yum! Brands Inc.
) are currently serving the market with a much wider scale of
In fact, since the last couple of quarters, China is driving Yum!
Brands' growth story. In Feb last year, Yum! commented that the
consumption is likely to double in China over the next decade as
urbanization steps up.
Yet another peer,
) also entered into a pact last year to unveil 50 restaurants in
China over the next 15 years. The first unit is slated for a 2013
Growing income of the larger populace makes China a lucrative
investment proposition. However, to be distinctive in this
competitive market, Ruth's will have to introduce variations in
its menu to attract consumers from different social strata as
well as focus on value offerings.
At present, Ruth's finest steaks are available in more than 150
company- and franchisee-owned locations worldwide spread across
the U.S. and several other countries and territories, including
Puerto Rico, Mexico, Canada, Taiwan, Japan, Hong Kong, Dubai,
Aruba, El Salvador and Singapore. Ruth's currently holds a Zacks
Rank #4 (Sell).