26 January 2014

Zimbabwe: Fast Foods Outlets Face Stiff Competition

COMPETITION in the fast food retail business is intensifying as established brands aggressively roll out branch network expansion projects.

This is despite the economic challenges characterised by an acute liquidity crunch, high unemployment and the attendant low disposable incomes and difficulties encountered by businesses in accessing funding.

New players in the fast food business are adopting innovative practices and focusing on venturing into new product lines, with competitive pricing strategies to lure consumers.

Innscor subsidiary, Fish Inn, which launched last year, sells fast food fish products and has already made an impact on the market.

"Our product offering has been very well-received by the market, but we are not at liberty to divulge the nature of performance, it's confidential information," Fish Inn general manager Takawira Tawengwa told Standardbusiness.

The subsidiary is already running a special short message service promotion termed "Quick Catch."

Fish Inn already has several branches in Harare as well as Chegutu and Mutare.

Innscor, which enjoys advantages of scale, with well over 25 branches in Harare, is presently embarking on an aggressive branch rollout targeting prime areas of the city's central business district and outskirts with substantial traffic.

This is meant to counter competitors who have been eating into the group's market share over the years.

Chicken Slice maintains that the increase in capacity utilisation ever since the company was formed would provide further opportunities for business growth.

Company director, Tawanda Mutyebere said more branches would be rolled out around Harare, Masvingo and Bulawayo to strengthen Chicken Slice's position on the market.

"This business is not easy, but the competition currently being experienced on the market is healthy for the sector. Without competition service providers tend to relax so I enjoy the competition," he said.

He said there is construction work currently being carried out in Mbare for a new branch, adding that brand and quality were imperatives rather than visibility.

Not all companies have done so well in the fast food business with Tawanda Nyambirai's TN Grill planning to close some of its branches in Harare.

"It is correct that we are closing some of our branches. A branch whose occupancy costs exceed our target ratio of occupancy costs to revenue will be closed down," said Nyambirai.

He said some of the fast food outlets have been good performers while others have not been performing as expected.

"We made many mistakes because we were new to this business. We also chose some bad sites," Nyambirai said, adding that the market would soon see a new model of TN Grill and TN Mart shops.

Other players in the fast foods business include recently opened African Fried Chicken, Chicken Spot and Chicken Den.


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