Company information

Restaurant group cashed in during World Cup

Famous Brands, the company behind restaurants such as Steers, Wimpy and Mugg & Bean, reported a boost in sales during the World Cup period.

System-wide sales across the group’s South African restaurant network grew 24% for the month of June compared with the prior year. This increase equates to 83% of turnover delivered in December 2009 – with December typically regarded as the group’s peak trading month.

Famous Brands CEO, Kevin Hedderwick, says: “At the outset of this process we identified our ‘non-negotiable’ World Cup strategy as being continuity of supply and consistency of product quality. Our commitment to our franchisees was to ensure uninterrupted supply, irrespective of the additional volumes that the group anticipated having to manage. Our key objective was to facilitate getting product to market.”

“In order to deliver on this commitment we had to implement a range of strategies, including modifying our logistics distribution pattern from a five day to a six day rolling week. In addition, we identified potential high volume sites and made provision for increased deliveries, hiring of additional fleet and supplying additional staff capacity. At some of our airport- and transient route sites we seconded our own internal operations staff to assist franchisees with the increased foot traffic. We also improved our call-and-collect process, which provided franchisees with additional flexibility in terms of obtaining product,” explains Hedderwick.

Hedderwick notes that the operations and logistics effort was complemented by the contribution of the group’s franchise partners. “Many restaurants extended trading hours until well after midnight on occasion. They performed brilliantly to ensure the product reached our customers.”

Famous Brands also benefited from its long-standing strategy to ensure brand representation at airports and en route petroleum sites. Wimpy and Mugg & Bean are represented at every single major airport in the country, whilst Steers, Steers Diners, Steers En Route and Wimpy have a strong presence on all major motorways across the country via the group’s strategic alliance partners including Engen, Shell and Total.

Hedderwick notes, “Our brands located on transient sites delivered an average 30% increase in turnover, with some as high as 49%. While comparative statistics for Durban and Cape Town airports are not available given that representation is only recent, sales from group brands situated at O.R. Tambo grew 64% in June, a phenomenal increase off a large base.”

Other high profile sites located near major tourist attractions or fan parks proved similarly successful. Revenue across the brands at the V&A Waterfront grew 88% while group restaurants near Durban’s North Beach fan park delivered sales growth of 97%. Restaurant sales at Sandton City increased 48%, while turnover at Melrose Arch grew by an astounding 116%.

In addition, says Hedderwick, the group’s restaurants situated at casinos around the country captured a significant share of the tourist influx. Famous Brands’ restaurants at Durban’s Sun Coast Casino grew turnover 118%, while MonteCasino in Gauteng and the Boardwalk in Port Elizabeth enjoyed increased revenue of 75% and 126% respectively.

Hedderwick says that restaurants in some of the smaller outlying towns also profited from soccer matches in their regions. Sales improved between 19% and 30% in Nelspruit, Rustenburg and Polokwane.

While Famous Brands’ restaurants benefited from strategic sites, the group’s marketing campaigns were also designed to raise the profile of brand usage during World Cup festivities. Debonairs Pizza launched its ‘Watch soccer, eat Pizza’ campaign aimed at local fans making use of the home delivery option and enjoying the games from their homes. The brand’s national sales increased 25% compared with June 2009. Wimpy’s ‘impi’ breakfast campaign achieved cult status when its television advert became a viral marketing sensation on a number of social networking sites. Sales grew 22% for the month of June. Despite competing with an official global sponsor, the group’s mother brand, Steers, delivered sales growth of 23%, while Mugg & Bean and tashas grew revenue by 27% and 75% respectively.

Hedderwick comments, “The first two weeks of July displayed a similar trend in sales growth to the month of June, although with fewer teams and fewer venues in contention, it is inevitable that a smaller percentage of our restaurants would have benefited. I am confident however that sales growth will have held up well for the period.”

Hedderwick says that he expects the second half of July to be quiet – similar to the traditional post-December holiday period. Given the anticipated drop in foot traffic, he notes that Steers, Wimpy and Debonairs Pizza will all be launching aggressive marketing campaigns using menu innovation and attractive pricing in order to drive feet into restaurants post-World Cup.

Hedderwick concludes: “Tourists were pleasantly surprised and delighted at the standard of our restaurant offerings – this World Cup event has proved that we can benchmark ourselves against the best in the world when it comes to our brands. I am proud of, and extremely grateful to our franchise partners who delivered these remarkable results, together with our own supply chain division, as well as third party suppliers, who never dropped a catch during this exceptionally busy trading period. They did our brands and our country proud.”

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