Hard to swallow
Why fast food stocks are losing their flavour
Cash-strapped customers add to the burden of a sector with its share of both blows and bonuses, writes Stafford Thomas
Making do with less in leanest of times
With their confidence shattered, consumers have gone into defensive mode, creating immensely challenging conditions for SA’s fast-food and restaurant sector. They are so challenging that Spur CEO Pierre van Tonder labels the current economic environment the worst in the franchise group’s 50-year history. Famous Brands made a similar comment in its results statement for the six months to August and noted its research reveals consumers are visiting casual dining and quick-service restaurants 16% less frequently than they did in 2016. "It is a time to keep costs under tight control, offer your customers great value and ensure that your franchisees remain profitable," says Van Tonder. The rot in market conditions set in during the last quarter of Spur’s year to June in earnest, Van Tonder says. It has already resulted in Spur having to step in and assist a number of franchisees financially. The general market downturn was not the only problem that Spur, which ended the year with 289 SA ...
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