Fast Food Chains Growing Fast, Spreading In Africa

Fast Food Chains Growing Fast, Spreading In Africa

Africa’s fast-growing prospects have caught the eye of South African restaurant franchises as well as global chains looking to expand into the rest of Africa, according to BusinessDayLive.

South African players such as Spur Corp., Famous Brands and Taste Holdings, hope to cash in on the surge in spending by Africa’s middle class – expected to triple by 2031, the report said.

Spur, whose brands include Panarottis, John Dory’s and Captain DoRegos, will open outlets in Swaziland, Nigeria, Tanzania, Namibia and the Seychelles in 2014.

In its annual report, released on Monday, the Spur restaurant franchise group said its strategy is to grow in existing territories to allow for the development of improved logistics, pricing and raw material efficiencies.

“Countries in the rest of Africa offer a good opportunity to enter higher growth markets although each market brings its own particular challenges,” Spur executive Pierre van Tonder said.

The group has 25 restaurants in its African division outside South Africa including nine in Mauritius.

“The two new Captain DoRegos (Mauritius and Namibia) have been received well and we believe that there is a large market for this offering in Africa,” the company said. “We continue to review our traditional models to adapt these to the higher set up, occupancy costs and other challenges we encounter in certain countries in Africa.”

Domino’s Pizza opened two restaurants in Nigeria in 2012 and is exploring expansion opportunities in Kenya and South Africa.

Yum Restaurants International, another international food company establishing a platform in Africa, said  intends to grow Kentucky Fried Chicken “exponentially” in the future.

Famous Brands, the owner of Wimpy and Mugg & Bean, In September acquired a 49 percent stake in Nigerian fast food business Mr Bigg’s, that it plans to use to entrench its position in Nigeria. Famous Brands’ network in the rest of Africa totals 172 restaurants in 15 countries and makes up about 8 percent of total sales — a figure the company wants to push to 15 percent over the next three years.

While rich pickings are available in the rest of Africa‚ this must be tempered with knowledge of the trading risks such as the lack of formalized retail infrastructure, power shortages and poor logistics, the report said.