The Collins Foods Ltd (ASX: CKF) share price has come under significant pressure on Monday.
At the time of writing the KFC and Taco Bell restaurant operator's shares are down 14% to $5.11.
Why is the Collins Foods share price sinking lower?
Investors have been hitting the sell button on Monday following the release of an update on its European operations.
According to the release, in response to the coronavirus outbreak, the Dutch Government has announced that all restaurants in the country must close with immediate effect until April 6.
As a result, the company's KFC restaurants in the Netherlands will not be able to operate as normal for the next three weeks.
At this stage, the Dutch Government has not revealed whether restaurants can continue to trade through channels such as delivery and/or drive through. Management expects the government to provide further information within the next 24 to 48 hours.
As of the end of the first half of FY 2020, Collins Foods had 23 restaurants in the Netherlands. This compares to 233 restaurants in Australia.
Australian update.
Late last week Collins Foods revealed that one of its stores in Queensland had closed after a team member tested positive for COVID-19.
This morning the company advised that its KFC Deagon restaurant has now reopened following the implementation of a deep clean and the granting of clearance for its employees to return to work.
Management added that it is working closely with the government and health bodies in the various jurisdictions it operates in and is following their guidelines.
The company intends to continue to implement all measures to ensure the safety of its employees and customers
Elsewhere, the Domino's Pizza Enterprises Ltd (ASX: DMP) share price is faring a bit better on Monday after providing its own COVID-19 update. Its shares are down 2.5% at the time of writing.
