Burger King’s whopping African expansion bid
BURGER KING Worldwide plans to enter new African counties before the end of the year as it follows Yum! Brands’s KFC chain in tapping demand from the continent’s middle class.
“Our African expansion plans are progressing at a vigorous rate,” Jaye Sinclair, the chief executive of Burger King South Africa, said in Cape Town, where the Miami-based fast-food chain’s first outlet in the country was opened in May 2013.
The maker of the Whopper burger operates the South African unit with Johannesburg-based leisure company Grand Parade Investments and the combined entity has rights to open outlets in Zambia, Botswana, Zimbabwe, Mozambique, Namibia and Mauritius, Sinclair said. The company has asked for permission to open stores in Angola.
Restaurant chains, retailers and consumer-goods companies are expanding in subSaharan Africa, where the number of middle-class households has tripled since 2010, according to Standard Bank Group. The lender classifies as middle class those who consume $15 (R180) to $115 a day. Wal-Mart Stores, the world’s biggest retailer, plans to increase African store space outside South Africa by 45 percent over the next two years.
McDonald’s, the world’s biggest restaurant chain, is also looking at potential new African markets to build on its growth in South Africa, chief executive Don Thompson said.
Pizza Hut, owned by Yum! Brands, plans outlets in Zambia and Angola in the first half of this year.
Burger King SA’s target countries in sub-Saharan Africa might get their first restaurants by the end of 2015 or early next year, said Sinclair, depending on how quickly supply chains and distribution centres could be set up. In South Africa, the chain would almost double the number of outlets to 60 by mid-year, he said.
“Our focus is on opening big-format drive-through units. We need to populate the landscape with our drive-throughs and then after that we will start doing in-fills of small stores.”
While “there is potential” to open as many as 200 to 250 outlets in South Africa in two years, the company would probably move slower than that, Sinclair said, without giving a specific target.
Burger King SA was talking to shopping-centre owners about building drive-throughs in parking lots and there were “quite a few of those under construction at the moment”, he said.
The company is also considering whether to add breakfasts, home delivery and extend trading to 24 hours.
The company has outlets in three of South Africa’s nine provinces and plans to open stores in at least four more, including the Eastern Cape in early 2016. Burger King also has African restaurants in Egypt and Morocco.
We need to populate the landscape with our drive-throughs and then start doing in-fills of small stores.