Burger King plans to repeat success in Gauteng

30 Jan 2014

Global fast-food chain Burger King is hoping to replicate its success in the Western Cape when it enters the more lucrative Gauteng market this weekend.

Image courtesy of Grant Cochrane / FreeDigitalPhotos.net

The chain - which first launched in SA in May last year - will open three stores on Saturday, at Park Station and on Rivonia Road in Johannesburg, and at a Sasol forecourt in Centurion.

Burger King entered the local market through a joint venture with JSE-listed Grand Parade Investments, and recently signed an exclusive agreement with Sasol to roll out stores at Sasol's fuel retail sites, initially in Gauteng.

Burger King SA CEO Jaye Sinclair said the chain's performance at its six Western Cape stores had been "absolutely phenomenal - way beyond any sort of expectation we might have had".

Burger King was hoping to achieve similar success in Gauteng, which holds the biggest share of SA's quick-service restaurant market.

Sinclair said Gauteng "historically fetches about a 30% premium on the ticket price compared to the rest of the country, so we are expecting Gauteng to be a big market for us".

Burger King would have five stores open in Gauteng by the end of next month and would also look to enter the KwaZulu-Natal market this year. The US-based group is a new entrant in a competitive South African fast-food-chain market that includes the likes of McDonald's and strong local incumbents such as Steers and Wimpy, owned by Famous Brands.

Sinclair said the group needed to be "very cognisant that there is competition out there, but we are just keeping our heads down and we don't want to worry about someone else's business".

"We are worrying about the growth of our business and we have got to ensure that we serve customers the finest quality at very competitive prices in an environment that the public are wanting."

Meanwhile, Burger King also plans to use SA as a platform to expand into fast-growing African countries. Its local licence agreement includes Namibia, Botswana, Zambia, Zimbabwe, Mozambique and Mauritius.

Sinclair said the group's main focus at the moment was on the South African market, where it was establishing its local supply chain, including its distribution and logistics network.

A move north of SA's borders was only likely to happen in 18 to 24 months' time.

Sinclair said that Burger King had strong interest from franchisor investors, landlords and developers.

Source: Business Day

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