Casual fast-food organization Famous Brands says emerging fuel prices and inflationary pressure have led to significant increases in the value of South Africa’s favorite fast-food chains, and the trend is expected to continue.
In presenting its intermediate effects for the six months ending in August 2022, the organization noted that consumers face greater monetary pressures due to emerging inflation and interest rates.
“During the review of the era, the South African client faced several macroeconomic problems, which were exacerbated by an inflationary environment,” he said.
“Rising costs of fuel, food, as well as oils, fats, bread and cereals, soft drinks and electricity have been the main drivers of inflation. first part of 2022, with additional construction planned for the rest of the year. “
Despite the unfavorable economic climate, Famous Brands said customer habit returned to general after the end of Covid-19 restrictions.
“Since the removal of all Covid-19 restrictions in June 2022, the places to eat industry has noticed a positive shift in customer behavior as customers return to places to eat, resume and attend sporting events. This has supported the improvement in profits from places to eat and marketing spending on places to eat,” he said.
Meanwhile, the risk of Covid-19 has decreased and many consumers are determined to resume life in general, he said.
“While consumers shop online for convenience or safety, they are also looking for meaningful interpersonal relationships. Competitors in the places to eat industry are constantly innovating their pricing proposition for consumers through packages, contests, loyalty systems and the employment of marketing campaigns for key perceptions of quality. .
Famous Brands’ portfolio of dining places, which includes popular fast-food chains like Steers and casual dining teams like Wimpy, performed well during the period.
Total turnover increased by 19% to R3579 million (2021: R3004 million). This gain is 11% higher than the R222 million (excluding Gourmet Burger Kitchen) in the comparable era ending August 2019, demonstrating a strong recovery from Covid-19. 19
Profit consistent with the increase increased by 77% to R393 million, while overall profit consistent with percentage increased to 215 cents (2021: 97 cents).
Leading Brands’ profit rose 25% to R431 million, while Signature Brands’ profit showed a strong recovery of 68% to R103 million. Better advertising conditions for franchise partners have allowed Famous Brands to finish the maximum of its Covid-19 royalty relief packages.
The removal of covid-19 restrictions slowed the expansion of the home delivery channel, as customers sat back down and ordered takeout, the organization said. However, home delivery remains a notable channel due to a long-term shift in customer habit towards the convenience of e-commerce.
Collection orders continued to show expansion as consumers continued to use this channel after the pandemic.
For the rest of the year, the company said it would focus on developing its delivery and logistics channels, and look to leverage the prime real estate area for leasing as the market has competition.
Read: 35 major projects planned for South Africa: adding fast-food restaurants and car factories
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