THINK ABOUT THE (BURGER) KING’S AR­RIVAL?

Finweek English Edition - - COVER STORY -

The ex­cite­ment sur­round­ing Burger King’s (BK) land­ing in Cape Town sparked frenzy, with queues spilling out the doors at its f lag­ship store for weeks af­ter open­ing. It then comes as no sur­prise that the com­pany’s Cape Town store had sales of R4.9m in its first seven weeks! But it won’t be long be­fore Jo’burg and the rest of South Africa get a chance to taste the leg­endary Big Whopper. Due to the well-re­ceived re­sponse from the mar­ket and nu­mer­ous fran­chisee no­tices of in­ter­est, hun­dreds of CVs and other po­ten­tial deal f low in­di­ca­tors that man­age­ment has re­ceived, the roll-out could be a lot more ag­gres­sive than an­tic­i­pated.

But how does the lo­cal com­pe­ti­tion feel about its en­try? Spur an­tic­i­pated the en­try of Burger King in the lo­cal mar­ket and thinks that there is a pos­si­bil­ity of more in­ter­na­tional quick ser­vices restau­rant (QSR) brands en­ter­ing the lo­cal mar­ket on the pizza side and per­haps the ca­sual

“THE MORE AC­TIV­ITY IN THE FOOD SER­VICE CAT­E­GORY, THE MORE IT WILL din­ing side. But the brand ap­pears to be un­per­turbed by this as the high stan­dards of the South African in­dus­try have seen other in­ter­na­tional bra nds c r a s h a nd burn as they en­ter the mar­ket.

Kevin Hed­der­wick, CEO of Fa­mous Brands, says that food ser­vice franchising is on a par and, in some cases, bet­ter than what we see in­ter­na­tion­ally and wel­comes the com­pe­ti­tion. “We need not have an in­fe­ri­or­ity com­plex about the qual­ity of the food ser­vice franchising busi­ness in SA. What we see is the ar­rival of a num­ber of in­ter­na­tional brands and that is good for the in­dus­try. The more ac­tiv­ity in the food ser­vice cat­e­gory, the more it will grow.”

As the group’s Steers QSR f lame-grilled burger of­fer­ing holds a ma­jor por­tion of the lo­cal mar­ket, the busi­ness is ex­posed to mar­ket growth and thus ex­pan­sion in the cat­e­gory would most likely work in its favour.

But Burger King’s brea k f a s t of f e r i ng is “highly com­pet­i­tive,” says Carlo Gon­zaga, CEO of Taste Hold­ings, “and may dis­rupt the fairly new Steers and McDon­ald’s break­fast of­fer­ings. Like­wise, Burger King’s chicken of­fer­ing is also highly com­pet­i­tive and will di­rectly com­pete with KFC.” Sa­sol and BK SA have em­barked on a joint ini­tia­tive that will see the two brands lever­age off one an­other’s strengths and ca­pa­bil­i­ties to en­hance the con­sumer ex­pe­ri­ence in the fuel re­tail en­vi­ron­ment. The deal al­lows for BK SA to open stores within Sa­sol’s national fuel re­tail net­work and will in­clude com­pany-owned out­lets. It will also award franchising op­por­tu­ni­ties to

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