Burger King sets sights on African expansion

SOUTH AFRICA – Burger King Worldwide plans to enter new African countries before the end of the year as it follows Yum! Brands’ KFC chain in tapping demand from the continent’s middle class.

“Our African expansion plans are progressing at a very vigorous rate,” Jaye Sinclair, CEO of Burger King SA, said by phone from 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, Mr Sinclair said. The company has also asked for permission to open stores in Angola, Africa’s second-biggest oil producer.

Restaurant chains, retailers and consumer-goods companies are expanding in sub-Saharan Africa, where the number of middle-class households has tripled since 2010, according to Johannesburg-based Standard Bank Group. The lender classifies as middle class those who consume $15 to $115 a day.

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Bentonville, Arkansas-based Wal-Mart, the world’s biggest retailer, plans to increase African store space outside SA by 45% 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 SA, CEO Don Thompson said on February 10.

Pizza Hut, owned by Yum! Brands, plans outlets in Zambia and Angola in the first half of this year.

Drive-throughs

Burger King SA’s target countries in sub-Saharan Africa may get their first restaurants by the end of 2015 or early next year, according to Mr Sinclair, depending on how quickly supply chains and distribution centres can be set up.

In SA, the chain will almost double the number of outlets to 60 by mid-year, he said.

“Our focus is on opening big-format drive-through units,” Mr Sinclair said. “We need to really populate the South African landscape with our drive-throughs and then after that we will start doing in-fills of smaller stores.”

While “there is potential” to open as many as 200 to 250 outlets in SA within two years, the company will probably move slower than that, Mr Sinclair said, without giving a specific target. Africa’s second-biggest economy expanded 1.5% last year, the slowest pace since a 2009 recession.

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Burger King SA is talking to shopping-centre owners about building drive-throughs in parking lots and there are “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 provinces and plans to open stores in at least four more, including the Eastern Cape in early 2016. Bloomberg

March 11, 2015; http://www.bdlive.co.za/business/retail/2015/03/09/burger-king-sets-sights-on-african-expansion

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