Famous Brands, which owns Steers, Wimpy and Debonairs, reported a lip-smacking 16.8% rise in franchise sales for the quarter March to May. Double-digit growth in such tough conditions is impressive. It speaks volumes about the group's efficiency, but also about SA's shifting consumption patterns. With the rise in double-income households, there is less time to cook.
What emerges from the performance of food companies such as Famous Brands, Spur Corporation and Taste Holdings is that middle-class consumers will part with their money if they perceive they're getting value and convenience in return. There's still plenty of scope for the sector to grow; in emerging markets, for every 1% growth in gross domestic product there is 2% growth in food services.
In the quarter, Famous Brands opened 34 new restaurants, mostly in markets where it was previously under-represented and where its brands are viewed as aspirational. It ramped up expansion with 46 new restaurants in the second quarter of the year.
Famous Brands has the recipe: food is not a luxury. Time is.
The extension of Rosebank's "The Zone" shopping centre a few years back is a living timeline of the effects of the recession. The development of the new "The Zone", which took inexplicably long to complete, added two levels of upmarket shops via a connecting walkway to the original The Zone, built in the late 1990s. The original houses cinemas, restaurants, a gaming alley and stores selling music, books and fashion. But Exclusive Books is closing, with its original store there failing to draw a replacement tenant.
This must be worrying for Old Mutual Property Investments. While the original The Zone has a decidedly youthful flavour, the extension is more upmarket. But Nine West, Sunglass Hut, Forever New, Africology and Brazilian Flair have shut, leaving their windows papered over. Expensive products are displayed in sizeable, well-lit shops, but few shoppers seem to venture there.
One store has big SALE signs (in mid-winter?) Another sells Byzantine earrings for R20. The second retail level is almost all papered up. An original tenant, an eatery still described by Groupon as "the perfect pit-stop for an average mother and daughter meal after a shopping marathon", is long defunct.
Another, always empty by day, presumably relies on night-time trade. Jimmy's Halaal Killer Prawns looks forlorn, while Karoo Cattle and Land advertises 200g steaks and a fancy sauce for R69.
Source: Business Day via I-Net Bridge
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