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Swot Analysis Of Fast Food Industry

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2. ANALYSIS OF THE FAST FOOD INDUSTRY IN SOUTH AFRICA
2.1 Structure of businesses in the fast food industry
2.1.1 Ownership
The fast food industry in South Africa consists mostly of franchises. This means that different entities own individual outlets of the brand. This allows for companies to broaden their horizons and make their brand more well-known while having to contribute significantly less capital and also taking up much less risk, however it is at the cost of lower profits per franchise and the risk that outlets could be mismanaged and damage the brand name.
2.2 Trends in the fast food industry
2.2.1 Income and revenue trends
The fast-food industry in South Africa earns over R300 billion annually (Mail & Guardian, 2016). Statistics …show more content…

Menus are also becoming more diverse as more outlets offer a range of foods including all meals and snacks in order to suit different budgets. Many fast food operators have begun offer smaller menu items at lower prices to appeal to the consumer desire for value for money and to remain competitive. KFC, for example, advertise the items on their menus below R10, R15, and R20 so as to attract the consumers with very little disposable income. Nando’s also offer a wide variety of foods to choose from with chicken pieces, wraps, burgers, salads, children’s meals and many more options so as to accommodate and attract customers with various different tastes and preferences. Steers also offer their Get Real Rave Burgers which sell for R14.90 (Steers Menu, …show more content…

One of the main factors is a broadening middle class. It is no coincidence that the sector has boomed at the same time as the growing middle class because more people have the disposable income to afford fast foods. Another main factor is an increase in the number of women in the labour force. This means more homes have two incomes and more disposable cash overall. But it also means that the traditional cook (stereotypically the woman in the household) has less time to prepare food. “Around the world, people are becoming asset rich but time poor. In other words, convenience eating is growing apace as people have less time to cook meals.” said Chris Gilmour, an Absa Asset Management investment analyst.
South Africa is also characterised by a meat consumption way above the norm and a culture of eating out, both of which are factors fast-food companies can and do capitalise on. Buying readily made meals, especially from well-known brands, has gained popularity. This means that even those living on very little might spend what little disposable income they have on

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