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The most popular types of fast food in South Africa

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Broll property has released its Retail Snapshot for Q3 2018, focusing on South Africa’s fast food sector.

Citing Stats SA data, the report notes that takeaway and fast-food outlets experienced a high year-on-year growth of 2.8%, whereas restaurants and coffee shops declined by 1.6% and catering services by -0.6%.

Takeaway and fast food outlets, in particular, have been recording a positive trend line since January 2008 with regards to total income recorded (inclusive of food, bar and other sales), it said.

“As at July 2018, a total income of R1.69 billion (constant 2015 prices) was evident for the sector overall. This was the second highest figure recorded over the first seven months of 2018, with March being the highest (R1.73 billion).

“The highest income recorded over this almost 10-year period, was R2.11 billion as at December 2016, while the lowest figure was R1.12 billion as at February 2010.”

“Moreover, some retailers have indicated that their drive-thru locations achieve higher revenue in comparison to their stores within shopping centres, and tend to be more resilient in tough times. With South Africa currently facing a technical recession, increased drive-thru’s may become more evident.”

Fast food in shopping centres

As part of the report, Broll investigated the average trading densities (TD) of a wide range of fast-food retailers across various shopping centre types over five years.

“Most of the fast-food categories tend to achieve above average TD when looking at the market average for fast-food overall, barring fish and other retailers which achieve below this,” it said.

“When looking at each year individually, pizza was the best performing fast-food category for years 1, 2 and 3, while in year 4, burgers took the top spot, followed by pies in year 5. This may be indicative of the tough times consumers are finding themselves under, thus the more affordable nature of the pies category has become more favourable.”

Broll noted that fast-food tends to perform better in larger-sized centres, with centres measuring over 25,000m² recording an average TD of R3,883/m² for fast-food overall, while centres below 25,000m² average R3,519/m².

When focusing on fast-food categories, in centres measuring <25,000m², the top three performing categories were burgers (R5,081/m²), chicken (R3,857/m²) and pizza (R3,686/m²).

In centres smaller than 25,000m², pizza was the best performing (R4,882/m²), followed by pies (R4,345/m²) and chicken (R3,860/m²).

In outer-lying areas across the country, pies, pizza and chicken are the best-sellers, with all other categories falling below the average for fast food overall.

Within main cities, burgers come out on top, with a TD of R4,242/m², followed by pizza and chicken.

Fast food overall within main cities records a higher TD in comparison to outer-lying areas: R3,747/m² versus R3,529/m² respectively.

“On a country-wide level, total income for Takeaway and Fast-food outlets has been experiencing an increasing trend,” Broll said.

“However, when looking at a select sample size of specific retailers, across varying centre types, decreasing TD are evident.

“This demonstrates that it is not only consumers that are under pressure, but retailers are feeling the pinch too,” it said.


 This article was sourced from BusinessTech; the original publication can be viewed here.

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