There is no doubt that food prices – as a result of the recent drought and the market volatility – are drastically affecting all industries that rely on food as a source of income or as a main driver for their business, and this is no different in the fast-casual dining sector.
Coupled with declining consumer spend, it is becoming ever more critical that companies within this sector find sustainable ways to address the increasing price of food for their customers – becoming innovative about the way in which they tackle declining consumer spend is central to such survival.
In fact, recent researchindicates that 71 per centof consumers take more packed lunches to work these days, as opposed to buying from fast food outlets/retailers during their work day. This is a sign of the times and as such, the fast food market has a need to start looking at creating value meals for its consumers, to maximise available spend within their stores and drive a strong market offering to the consumer – not only in taste, but in affordability too.
Being seen as a value-for-money provider in constrained times will ensure that outlets are able to gain a portion of the little consumer spend that is still available. Today, it is so much more than just driving the bottom line but, very importantly, about keeping up with changing market trends to remain relevant and capitalising on consumer expectations.
Further to this, businesses should ensure they consistently have control of their supply chain as this is fundamental to the quality expected from a food related outlet – which cannot be compromised over price and, very importantly, ensures feet through the door and revenue ticking over.
According to The Franchise Association of South Africa, franchises continue to be a major player in the economy, as franchising contributes 12 per cent to the country’s GDP and, as a result, offers businesses the opportunity to access different sectors, including international brands and markets.
In light of this, franchisees must realise the value of expansion in improving profits and building brand equity – especially in tougher times. A mistake that business owners make however, is that they tend to focus solely on what they have when the market is down. However, it is now when new opportunities should be considered, and the fast-casual dining sector presents a great opportunity in this regard.
We live in a time where everything is fast paced and on-the-go, which explains the continued need for people to grab a quick meal on the run and of course, for us, presents numerous global and African growth opportunities that can be harvested – to compensate for the dynamic nature of the industry currently. Despite the potential for continental and international growth, it is important for local businesses to choose the right partners before they decide to expand into these markets. One way of doing this is to collaborate with international partners that share the same passion, values and vision for business growth.
As with any other business, there will always be challenges – no matter what the industry – and so it is about finding the gap in a crowded market, embracing the dynamic nature of the industry, choosing the right partners and having the right mindset to deliver quality food that is deemed as value-for-money and generates the correct revenues.
Businesses that look beyond the key challenges and use these as opportunities to grow, expand and deliver what consumers expect will go a long way – no matter what the economic platform is like.
It is up to franchisees in the fast food sector to make the change today – build on their model and allow the consumers to become brand loyalists.