Famous Brands to open 250 restaurants

The group, whose portfolio includes Steers, Wimpy, and Debonairs Pizza last year celebrated the opening of its 2000th restaurant and has long been credited with introducing the franchise model to the local food industry.

On Monday it reported a 15% rise in diluted headline earnings per share to 272 cents for the year ended February.

Revenue was up 15% to R2.15 billion, while operating profit grew 15% to R 413 million.

A final dividend per share of 120 cents was declared from 85 cents previously.

"The period under review remained challenging for retailers.

"Pessimistic consumer sentiment prevailed in an environment featuring continued high levels of unemployment and indebtedness, limited real wage increases, and consumer spend pressured by rising power and fuel costs and widespread food inflation," Hedderwick lamented.

Even though there's been an increase in the number of consumers across the food services category, the frequency of visits declined 10% to its lowest level in twelve years, according to Nielsen figures.

"So we have more and more people coming into the category and industry but they are visiting restaurants less.

"This is an industry number, not a Famous Brands number - 3.3 visits every four weeks. Compare this to 6.4 visits in 2008 when the economy was really pumping - so it's come down quite dramatically," Hedderwick told I-Net Bridge/BusinessLIVE.

"People are under pressure in terms of disposable income," he added.

Nevertheless, the quick service restaurant group still sees growth potential in the local market and will continue to invest on its home turf in areas where it has poor representation, like KwaZulu-Natal and the Western Cape.

The company, like other retailers in the food space, is also making a concerted effort to spread its footprint northwards.

With Africa's consumer spending forecast to hit US$1.4 trillion in 2020, market players are hoping to cash in on a burgeoning middle class, whose disposable income is rising rapidly.

"We trade in 15 countries right now, and we've been in Africa for twelve years, we are not like those guys who just started there yesterday, we've paid our school fees - it's a tough place to trade," Hedderwick said.

The group has a dedicated focus on Africa by virtue of having divided the territory into three categories: West Africa, Southern Africa, and Central Africa - each with its own country manager.

"Our philosophy about Africa is to think narrow and deep rather than wide.

"So we go into existing countries and work that country very hard. For example in Zambia we now have 19 restaurants. We have Steers, Debonairs Pizza, Milky Lane and we just launched Wimpy and Mugg & Bean there," Hedderwick said.

"In the immediate short term we have a business model where we plan to open 47 restaurants outside of SA," he added.