{"id":800300,"date":"2024-11-20T07:00:00","date_gmt":"2024-11-20T05:00:00","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=800300"},"modified":"2024-11-20T16:49:43","modified_gmt":"2024-11-20T14:49:43","slug":"fast-food-chains-in-south-africa-feeling-the-heat","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/business\/800300\/fast-food-chains-in-south-africa-feeling-the-heat\/","title":{"rendered":"Fast food chains in South Africa feeling the heat"},"content":{"rendered":"\n<p>South Africa&#8217;s Quick Service Restaurant (QSR) industry is navigating a bumpy year: battling inflation, budget-conscious consumers, and fierce competition from both traditional rivals and emerging threats like grocery retailers and coffee shops.<\/p>\n\n\n\n<p>Because of this, the sector\u2019s ability to adapt has become the key to survival.<\/p>\n\n\n\n<p>These are some of the findings of retail research company Trade Intelligence&#8217;s recently published <a href=\"https:\/\/www.tradeintelligence.co.za\/Content\/food-to-go-report\">Food To Go report<\/a>.<\/p>\n\n\n\n<p>Global sales in quick-service restaurants (QSR) are close to $1 trillion (~R17.98 trillion), but growth slowed down in 2023, increasing by 1.1%. <\/p>\n\n\n\n<p>South Africa has a large fast-food footprint, dominated by <a href=\"https:\/\/businesstech.co.za\/news\/business\/792309\/the-biggest-fast-food-franchises-in-south-africa-in-2024\/\"><strong>the leading 10 players<\/strong><\/a>. According to the report, 54% of South Africans have purchased fast food in the \u2018past year\u2019; 45% of which in the \u2018past month\u2019.<\/p>\n\n\n\n<p>Locally, the report noted that QSR growth saw 11.2% growth supported by food inflation, but real growth sits much lower.<\/p>\n\n\n\n<p>\u201cQuick service restaurants have experienced solid growth in 2023, despite constrained consumer spending,\u201d&nbsp;says Sandy Sutton, Retail Analyst at Trade Intelligence.<\/p>\n\n\n\n<p>However, she added that it is the same food inflation that has eroded spending power that has supported QSR growth.<\/p>\n\n\n\n<p>&#8220;South Africa&#8217;s QSR industry has been through a rollercoaster year, juggling consumer budget constraints, soaring inflation, and operational strains,&#8221; related to service delivery woes, said the company.<\/p>\n\n\n\n<p>&#8220;With fast-food prices reaching limits that even loyal patrons are struggling to accept, QSRs find themselves facing fierce competition from existing rivals but also mounting competition from grocery retailers, small-box stores and coffee shops.&#8221; <\/p>\n\n\n\n<p>Trade Intelligence said that QSRs are under pressure from all angles:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Inflation<\/strong>&nbsp;is driving fast-food prices;<\/li>\n\n\n\n<li><strong>Eating habits are changing<\/strong>;<\/li>\n\n\n\n<li>A&nbsp;<strong>channel blurring&nbsp;<\/strong>between QSR and fast casual restaurants as they compete for \u2018share of stomach\u2019;&nbsp;<\/li>\n\n\n\n<li>An increase in&nbsp;<strong>coffee shops<\/strong>&nbsp;and small box stores;<\/li>\n\n\n\n<li>South Africa\u2019s&nbsp;<strong>grocery retailers<\/strong>&nbsp;competing with QSRs for a slice of the food-on-the-go sector<\/li>\n<\/ul>\n\n\n\n<p>&#8220;Local QSR operators remained resilient and navigated the challenges by balancing price increases and meeting customer demand for value,&#8221; said Trade Intelligence.<\/p>\n\n\n\n<p>However, the report South Africa\u2019s top QSRs have not been immune to the effects of the current stagnant economy, as indicated by its latest consumer penetration data, which says that 9 of the top 10 QSRs and fast-casual restaurants in South Africa have declined in consumer footfall in the past two years.&nbsp;<\/p>\n\n\n\n<figure class=\"wp-block-embed is-type-wp-embed is-provider-businesstech wp-block-embed-businesstech\"><div class=\"wp-block-embed__wrapper\">\n<blockquote class=\"wp-embedded-content\" data-secret=\"xOvwtighTU\"><a href=\"https:\/\/businesstech.co.za\/news\/business\/784889\/the-most-popular-fast-food-chains-in-south-africa\/\">The most popular fast food chains in South Africa<\/a><\/blockquote><iframe loading=\"lazy\" class=\"wp-embedded-content\" sandbox=\"allow-scripts\" security=\"restricted\" style=\"position: absolute; clip: rect(1px, 1px, 1px, 1px);\" title=\"&#8220;The most popular fast food chains in South Africa&#8221; &#8212; BusinessTech\" src=\"https:\/\/businesstech.co.za\/news\/business\/784889\/the-most-popular-fast-food-chains-in-south-africa\/embed\/#?secret=RNnr2tZqI0#?secret=xOvwtighTU\" data-secret=\"xOvwtighTU\" width=\"500\" height=\"282\" frameborder=\"0\" marginwidth=\"0\" marginheight=\"0\" scrolling=\"no\"><\/iframe>\n<\/div><\/figure>\n\n\n\n<p>Famous Brands, the parent company of Debonairs Pizza, Steers, and Wimpy, has closed 41 locations in the past six months, attributing the closures to changes in consumer behavior and shifts in local demographics.<\/p>\n\n\n\n<p>The report noted that digital transformation has driven innovative changes, improving convenience, customer engagement, and operational efficiency.<\/p>\n\n\n\n<p>\u201cOngoing innovation in digital technology is driving consumer engagement, enhancing convenience and the shopper experience,\u201d&nbsp;said Sutton.&nbsp;<\/p>\n\n\n\n<p>\u201cLeading in consumer-centric innovation will be key to success in the QSR sector,\u201d she added.<\/p>\n\n\n\n<p>Trade Intelligence said that as South Africa\u2019s QSR industry faces economic challenges and changing consumer behavior, resilience and innovation are crucial for survival. <\/p>\n\n\n\n<p>Success will depend on adapting through value-based offerings, digital transformation, and navigating intense competition. <\/p>\n\n\n\n<p>&#8220;For QSR operators and their suppliers, the opportunity lies in finding creative ways to thrive in this highly pressurised market,&#8221; said the company.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p>Read:<strong> <a href=\"https:\/\/businesstech.co.za\/news\/finance\/800299\/savings-under-pressure-in-south-africa\/\">Savings under pressure in South Africa<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>A new Trade Intelligence report shows that South Africa&#8217;s fast food industry faces pressures on multiple fronts; requiring resilience, innovation, and adaptation.<\/p>\n","protected":false},"author":101,"featured_media":796197,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9872],"tags":[9399,26,21048,853,20434],"class_list":["post-800300","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-fast-food","tag-headline","tag-qsr","tag-south-africa","tag-trade-intelligence"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/800300","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/101"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=800300"}],"version-history":[{"count":9,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/800300\/revisions"}],"predecessor-version":[{"id":800646,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/800300\/revisions\/800646"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/796197"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=800300"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=800300"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=800300"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}