The quest for dominance in the fast food market has gone a gear up in recent past as the number of fast food companies has been increasing in the recent past with major chain fast food outlets doubling down on store expansion as they try to outcompete each other.

Interestingly, some are now getting into areas they were not usually trading in, such as high-density areas, all in a quest to get that customer and establish a first-mover advantage. One can almost postulate that where one competitor goes, another follows as they try to outwit each other to win customers’ hearts.

Such is the competitive environment, but given the cropping up of new stores almost everywhere, one would question whether they still use a scientific method for site selection. Because in business, you can follow the competition or do your market research. Some players will get burnt in the long run as the dust settles and profitability and return on investment become the focus apart from growth and market share.

An interesting case is where three major chain food outlets in the country, Chicken Inn, Chicken Slice and KFC, all set up within 1 km of each other along Chiremba in Braeside. Chicken Inn set up along that road, and we saw Chicken Slice located just next to it, a stone’s throw away. KFC was then located along the same road about 500m from Chicken Inn. KFC has a good spot with frontage on two major highways, Chiremba Road and

Glenera South Avenue. That may pry away some customers from its rivals who use those major routes for convenience, visibility and accessibility.

Talking about the issue of convenience and accessibility, these major players are increasingly competing for space along major transport corridors like Chiremba Road, as mentioned, Mutare Road, Masvingo Road and Lomangundi Road. Visibility, convenience and accessibility are the name of the game and any location which meets these criteria is under the spotlight.

We have also witnessed #chickenwars happening along Mutare Road, setting up the KFC in Zimre Park and Chicken Inn to set up on a convenience centre currently being constructed at Msasa round-about opposite Pick n Pay Headquarters. The same is also happening along Kirkman Road. KFC is located at Belvedere shops. Simbisa brands like Chicken Inn, Pizza Inn, and Bakers Inn are located at the mall at Sanganai and Steers at the recently opened Madokero Mall. Simbisa Brands also set up at N Richards along Bulawayo Road and Dzivarasekwa (Magetsi area).

Simbisa is the leader in terms of the number of outlets and given the number of outlets it plans to set up this year, it will maintain that lead. The other brands are playing catchup. And KFC has had some reawakening, getting out of its slumber of the last few years and has been very aggressive in expanding its stores.

The outlets being established are showing the new trends and the strategic thrust of the key players in the fast food business:

  • There is now more focus on the transumer market, consumers who make their purchases whilst on the move. These players are now focusing on the drive-thru market. This is a growing market as witnessed by the rise in car ownership due to relatively cheap second-hand car imports.
  • Whilst drive-thrus are increasing, they are coming from a low base, and we are likely to see an increase of this format in trade areas that meet the customer profile, that is, low to medium densities with generally low to moderate population densities but with high vehicular traffic flow. This is the case with fast food outlets along Chiremba Road, some along Lomagundi in the Westgate Area (Simbisa brands, KFC, Pizza Hut, new Simbisa branch coming soon at Msasa roundabout, among others.
  • Given the location of some of these drive-thrus along major national corridors, its clear that the fast food outlets are no longer just looking at the purchasing power of Harare but much broader, including areas outside Harare, including its satellite towns and beyond, trying to capture in-bound travellers into the capital.
  • Move to high-density areas. Fast food outlets are now targeting high-density areas like Chitungwiza, Dzivarasekwa, and we will most likely see more outlets in other high-density areas. They are now willing to work around load shedding issues and the high operating costs it brings due to them running alternative power sources such as generators and solar.
  • Fast food operators are fighting for retail space in suitable locations. From a property perspective, this demand for outlets provides opportunities for property developers. We have seen some of them partnering with property developers to secure space through pre-let agreements in developments that they will be doing, and this trend will continue. One can say probably shopping centres are letting down the food outlets as they usually ride on shopping centres, given that’s the format they prefer to use rather than having free stand-alone sites.
  • The upward trend in opening new outlets is now a launch pad for online sales. This means easy and quick access to the consumer and, ultimately, better delivery times. Customers can get their food when and where they need it, at their convenience. This channel is yet to be fully utilised.
    Given these dynamics and new entrants into the fast food business, feasibility and site selection due diligence are imperative. It goes a long way in building a competitive advantage since a location cannot easily be replicated. The success of a restaurant depends mainly on location. Whilst currently, the players are setting up almost everywhere as they try to take away space from each other, places aren’t static, demographics and economic patterns change over time, and this may make some current locations which are viable and attractive not be so in the future.
    So time, as always, will tell how sustainable these new outlets are. In the short term, due

to consumer hype, one might not see the underperformance of an outlet, but over time, the real trends will start to emerge. Granted, any new restaurant or any business operation, for that matter, can experience a boost in sales from these new outlets, but over time, sales and operating margin levels will normalise as the novelty wears off. Through that, we will see how good some of these locations they are opening are.

We have seen the chicken wars intensifying in Harare and are likely to see this trend in other towns. As the fight continues and good locations become scarcer and harder to find profitable sites, a more data-driven approach to finding profitable sites is needed, and location analytics goes a long way in establishing and maintaining a business’ competitiveness in this market. It is now increasingly crucial than ever to rely on data.

Through location analytics, businesses can assess how profitable or resilient a site is before investing in it by appreciating dynamics such as demographics, value density, population densities, disposable incomes, psychographic factors, location, etc., of the trade areas they want to operate in. These insights give them a strong sense of the market potential, target areas they should focus on, and how current and future competition will likely affect their operations. This might sometimes save businesses millions in potential losses because proper due diligence would have been done.