Top 15 SA fast food brands account for 80% of stores

The company recently analysed masses of population and economic data to help inform fast-food franchisors where the best places would be to establish outlets. The study yielded some interesting numbers.

• The top 15 brands account for 80% of the stores.
• There are around 50 fast food chain brands in South Africa, operating out of 5,800 brand outlets.
• 90% of South African residents live within 5km of at least one fast food outlet and almost half of them have a fast food restaurant within 1km of their homes
• Households in the highest income brackets are likely to spend between R1,400 and R1,500 per month on takeaways. A typical family within those brackets will visit roughly twice a week and spend just over R200 each time.
• On the lower end of the income scale, families will usually visit less than once a month, over the course of a year and their monthly spend will be around R10-R70 per month.
• Households in the Johannesburg, Cape Town, Tshwane, Ekurhuleni and eThekwini metros are the biggest spenders.

The top 15 brands account for 80% of the stores.

“Unfortunately, these data aren’t conveniently spread out in homogenous little pockets across the country. South Africa is one of an unequal countries in the world when it comes to income distribution. This means that in some areas there are many people with a little to spend, while in other areas there are fewer people with much to spend.”

Finding unsaturated markets

For a fast food chain looking to expand, the franchisors need to know where the best place is to set up their next store. Among other things, this means knowing where to find the right type of customers (hungry, with money) with the appropriate levels of access. “Essentially, they need to know where the unsaturated markets are. These are areas where people have disposable income but where access to fast food outlets is limited.”

With South Africa in a recession, the possibility of interest rates going up, and escalated petrol and food prices, it means even less money to spend on things like restaurant visits and take out. Franchisors must work even harder and focus on several factors, not just location, to get feet in the door. The downward changing economic environment will affect consumer spending behaviour and this is where using an experienced big data mining company pays dividends, said Lightstone Explore.