Fast food sector remains top of mind in franchising

According to the FASA 2023 Franchise Survey, sponsored by Absa, the largest franchise sector is fast foods and QSR restaurants at nineteen percent (19%). Retail and direct marketing follows at 17%, building, office and home services at 12%, and automotive products and services at 10%. Similar in size are childcare, education and training and business-to-business services (7% each), and health, beauty and body culture at 6%. The smallest categories (5% and lower) are real estate services, dine-in restaurants, leisure and entertainment, construction and related, personal services, and digital and technology. New sectors were introduced in 2023, but other than dine-in restaurants (which were split off from fast foods and restaurants) at 5%, incidence of these new sectors was minimal.

FASA’s survey showed that in the fast food and restaurant sector, there was evidence of some recovery in 2022; however, this recovery was severely limited by the rolling black-outs, and water cuts in some areas, which has put pressure on many operators. Others have successfully expanded into the African continent, as well as to countries like Australia, Portugal, the United Kingdom, the United States of America and the United Arab Emirates.

There are signs that, as consumer preferences change, fast food brands need to monitor the market constantly and communicate with consumers about these trends and how they (the fast food brands) are evolving and/ or innovating to meet needs better. This in-depth look at which brands consumers opt for was undertaken by Eighty20, South Africa’s leading consumer insights and data science firm, which unpacked some interesting insights into the country’s fast food dining habits. Using data from MAPS, a nationally representative survey of 20,000 people conducted by the Market Research Foundation, the report highlights South Africa’s preferred protein choices and the top 10 fast food outlets.

“In the past year, one out of every two adult South Africans – totaling 23.4 million people – purchased fast food”

Approximately 20 million of them dined at a fast food outlet in the past month, a figure that has remained relatively stable over the past 12 months. Notably, 90% of these 20 million individuals chose to eat at one of the top 10 fast food outlets (see the chart below).

Fast food customer behaviour reflects economic trends over the past year. “Despite the number who eat out remaining stable, all outlets in the top 10 except KFC, have lost customers. Meanwhile, restaurants that gained customers according to MAPS include Pedro’s, Fish and Chip Co, Galito’s and Honcho’s. This suggests that people are not eating out less but are opting for more affordable options,” says Andrew Fulton, Director at Eighty20.

Top fast food outlets 2022 to 2024

The top 10 fast food outlets show some variability (with McDonald’s swapping to 3rd place with Debonairs in the most recent research), but overall, they have remained relatively consistent over time.

Among restaurant brands, beef options dominate the top 10, but chicken still emerges as the clear winner in terms of the number of people served. The top 10 fast food outlets include one pizza restaurant, Debonairs, and five primarily beef-focused establishments: McDonald’s, Spur, Burger King, Steers, and Wimpy. Although Wimpy and Spur offer diverse menus, grouping them with the beef cohort accounts for 6.7 million unique customers per month. In contrast, the four chicken-focused outlets in the top 10 – KFC, Chicken Licken, Hungry Lion, and Nando’s serve 15 million people. Remarkably, one in four South Africans dined at KFC last month, surpassing the combined customer count of six outlets in the top 10.

MAPS tracks customer numbers rather than revenue, which depends on several factors including customer volume and visit frequency. Over 11 million people dined at KFC in the past month, but only 15% of these customers visit weekly – the lowest frequency, alongside Hungry Lion, among the top 10 brands. In contrast, Nando’s sees 38% of its customers visiting weekly or more. Despite this, KFC still has 500,000 more weekly customers than Nando’s total customer base.

Primary factors influencing South African’s choice of a food outlet

• Good Quality Food: Preferred by 7 million people, strongly associated with Chicken Licken, Debonairs and Steers.
• Good Value for Money: Valued by 5.4 million people, with a strong correlation to Hungry Lion.
• Generous Food Portions: Important to 4.8 million people, also strongly associated with Hungry Lion.

Secondary Factors:

• Good Customer Service: Steers, Chicken Licken and Mochachos lead in this area.
• Convenient Location and Consistent Meal Experience: Chicken Licken, Debonairs, and Steers are notable for these attributes.

In terms of lower order factors, it’s no surprise that Spur and Wimpy are correlated with kid-friendly attributes such as play areas, toys, and kids’ meals. McDonald’s stands out for its “good vibe”, consistent meal experience, dessert offerings, and menu options that cater to the entire family. Interestingly, none of the top 10 fast food outlets are strongly associated with healthy meal options. For healthier choices, Kauai, Simply Asia, Woolworth’s Café, and Burger Rack show the strongest correlations.

Ordering habits

When exploring ordering habits, of those who ate fast food in the past year 9m people have ordered food for delivery (either directly from the restaurant or a delivery company), with 1.4 million of those saying they prefer delivery for their takeaways, with MrD leading over Uber Eats and restaurant-specific apps. McDonald’s, Nando’s, Wimpy and Burger King are the top brands associated with delivery service use. Spur, Nando’s, and McDonald’s are strongly correlated with drive-through service, as well as ordering via app or website. KFC, Hungry Lion, and Chicken Licken are more likely to see customers ordering at the counter and leaving, while Steers and Debonairs are associated with counter orders and dining in. MAPS data, analysed by Eighty20 using correspondence analysis, reveals a few trends in takeaway purchasing behaviour. The insights show that customers visiting KFC, Steers, and Hungry Lion often combine their visits with other shopping activities, while those heading to Debonairs, Burger King and McDonald’s are more likely to make special trips specifically for these eateries. However, Nando’s and Spur customers opt for food delivery services.

“Collectively, 16.3 million people have eaten from the top 5 fast food outlets (KFC, Chicken Licken, McDonald’s, Debonairs and Hungry Lion) in the past month, which is higher than the 16.2 million South Africans who voted in the recent election. Food for thought during this election period.” concludes Eighty20.

About Eighty20

Eighty20 is a consultancy based in Cape Town South Africa specialising in delivering customer centric strategies and solutions to our clients. We use the power of strategy, research and analytics to help our clients understand their customers better and implement customer centric solutions that drive value to both customers and shareholders

For more information, visit Eighty20