Fast food thriving in South Africa thanks to load shedding

 ·22 Aug 2023

Spur has posted a strong financial performance as customers seek respite from load shedding.

In its financial results for the year ended 30 June 2023, Spur said that its volume growth was mainly driven by the Spur brand’s 24.9% increase in sales.

“The Spur brand has been well positioned to meet customers’ needs during load shedding hours, with the grills remaining on, offering a safe place for kids to eat and play, and for parents when they are unable to feed their families at home,” the group said.

Panarottis (18.6%), RocoMamas (9.6%) and John Dory’s (8.7%) all saw sales increases. Speciality brands also saw a 42.2% increase, which the group said was driven by the Hussar Grill and Casa Bella following an expansion in local and international tourism.

“Although economic conditions remain challenging in the face of higher inflation and severe pressure on consumer disposable income, the group’s business model continues to demonstrate its resilience. In the second half of the financial year, restaurant sales increased by 15.1% over the comparable period of the prior financial year,” the group said.

“Load shedding fuelled consumers’ ongoing demand for convenience, and the group’s local takeaway sales now represent 15% of total restaurant sales, with 52% as collect orders (call, click or walk-in). The balance of takeaways is delivered by Mr D and Uber Eats.”

“The largest contributors to takeaway sales remain RocoMamas at 47% and Panarottis at 35%, which confirms consumer choices of selecting burgers and pizzas as the ideal eat-at-home option.”

The group also opened three drive-thru’s during the period: one Spur and two RocoMamas, which forms part of the group’s convenience strategy.

The group also increased its number of restaurants to 639 (June 2022: 631) in 14 countries, with 22 new restaurants opening in South Africa, including nine Spurs, five RocoMamas, four Hussar Grills, and three Panarottis.

However, 20 local restaurants were closed due a result of marginal performance as they were unable to keep up with difficult market conditions.

Amidst the overall strong showing, group headline earnings increased by 75.9% to R213.1 million (2022: R121.1 million).

The group’s dividend per share was also upped from 127 cents in 2022 to 192 cents in 2023.

Below are some of the group’s key financials:

Doppio Zero

It was also announced that the group would acquire a 60% interest in Doppio Zero, Piza e Vino and Modern Tailors, adding 37 franchised and company-owned restaurants, as well as Doppio’s bakery and central supply business.

Doppio Zero founders Paul Christie and Miki Milovanovic will each retain a 20% share in the business and continue as executives for another five years.

In its financial year ended February 2023, the Doppio Zero Group generated in excess of R600 million in sales.

“It is anticipated that the acquisition will strengthen the group’s position in the day-time speciality dining segment and accelerate the group’s entry into the speciality coffee market,” Spur said.

“In addition, the Doppio Group’s owned and franchised restaurant businesses are currently largely represented in Gauteng, and there are opportunities to leverage the group’s relationships with existing franchisees to expedite national expansion of the acquired brands.”

Read: 14 biggest fast-food franchises in South Africa

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