They’re Back!! After leaving the country during the recession in 2008, Pizza Hut has returned.
YUM! Brands’ Pizza Hut chain is returning to South Africa after a six-year absence with a new focus on delivery meals and a plan to use the country as a platform to enter other parts of the continent.
The first new outlet will open in Johannesburg today, Randall Blackford, general manager for Pizza Hut Africa, said Tuesday. Six more stores are planned for Gauteng by the end of this year. Pizza Hut will also open outlets in Zambia and Angola by the first half of 2015, he said.
“For us not to be in Africa seemed really a shame for a global brand,” Mr Blackford said. “As we start to look at the Africa pizza market it seemed like a really exciting market.” Blackford says they are thinking of putting up six more Pizza Hut stores by the end of this year, with another couple of dozen stores to be opened by the end of 2015. Hopefully, Durban will be on the list for a Pizza Hut store before the end of 2015.
International restaurant chains and other retailers are increasing their presence in Africa, which is home to the world’s youngest and fastest-growing population, according to a McKinsey & Co report in 2010. Burger King opened its first restaurant in South Africa last year and said it would consider outlets elsewhere on the continent, while McDonald’s said in February it’s looking at new African markets.
When Pizza Hut last had a presence in South Africa in 2008 it was geared toward customers who sat and ate in its restaurants. This time the company sees its biggest opportunity in a delivery and take-away offering, Mr Blackford said. Pizza toppings aimed at South Africans will include the boerewors beef sausage and spicy peri-peri chicken.
Pizza Hut is the latest franchise restaurant to take advantage of South Africa’s fast-growing middle class. The pizza company, which moved away from South Africa, is returning, with its doors opening tomorrow.
Their newly branded Pizza Hut Store is at the Honeydew Village Shopping Centre, west of Johannesburg, Pizza Hut Africa management say it will be leveraging on the success of KFC’s business model. The plan is to to re-enter South Africa and expand into emerging markets.
Yum! Brands, the parent company of KFC, Pizza Hut and Taco Bell, will be piggybacking on the successful expansion business model of KFC to re-enter South Africa and expand into emerging markets, says the group.
Since last exiting the country in 2008, the fast food services restaurant has re-entered South Africa, using SA as its entry point to the rest of the continent.
Pizza Hut says it will be following KFC’s business model closely. The company’s legal advisor Ntswaki Kutumela, has backed this, saying KFC has achieved incredible growth in South Africa and other emerging markets and Pizza Hut will be leveraging on that success.
But what is their competitive advantage over other pizza restaurants that offer delivery and takeaway services?
They say their advantage is that they’ve asked local pizza consumers what they want.
“We spent a lot of time talking to people around the country and besides the social aspect of sharing a slice of pizza, there were specific things the market felt was still missing,” says Blackford.
“They want a lot of meat and cheese on the pizza and they didn’t feel their needs were being served by the existing players. We realised this was a huge opportunity for us,” he adds.
As a result, Pizza Hut has several pizza flavours specifically designed for South African consumers, and this includes the chicken per-peri, which has peri-peri as the base sauce instead of tomato sauce. But there are also vegetarian pizzas available on the menu.
“We believe in using the retail opportunities that are available to us in South Africa and other emerging markets as well. We are leveraging on the model of KFC,” she says.
This will include following the market’s convenience structure of takeaways and making deliveries. But Pizza Hut is pushing the boundaries a step further, allowing customers to make their orders online.
Pizza Hut Africa General Manager, Randall Blackford, says they have big aspirations for both the South African market and the rest of the continent.
“Africa is a very big deal for us. We made the call about this time last year to say lets go hard after Africa, let’s starts in South Africa.”
The group decided to invest in re-entering into South Africa, an investment that has created 100 jobs so far.
Africa is a very big deal for us. We made the call about this time last year to say lets go hard after Africa, let’s starts in South Africa.
Pizza Hut has 15 000 restaurants in over 90 countries and while every county is different, Blackford believes they will get a return on investment with their operations in South Africa.
“It’s a model that seems to work pretty well around the world. We came into this market with a great deal of culture so we could make it succeed as well,” he says.
Like, KFC, which has enjoyed huge success in the townships, Pizza Hut is looking to penetrate this space, but are not willing to settle for just any spot. We wonder which spot will be best for their first store in Durban.