- They lack consistent service delivery – Brand experts
- AFFCON blames woes on multiple tax, lull in economy
Indigenous Quick Service Restaurants in Nigeria have shut down operations in 500, out of over 800 outlets across the nation in two years, investigations by The Point have revealed.
Similarly, a market research conducted by the United States Department of Commerce’s Commercial Service also confirmed that only 290 QSR locations were operating across Nigeria. The popular brands are Mr. Bigg’s, Tantalizers, Food Concepts, the parent company of Chicken Republic; Tastee Fried Chicken and Sweet Sensation.
From about N200 billion revenue recorded in 2016, an impeccable source in the Association of Fast Food Confectioners of Nigeria disclosed that the sector could not be proud of a revenue worth N100 billion at present.
The source added that the situation had also increased the unemployment rate in the country, as their work force dropped from over 500,000 in 2016 to about 200,000, representing about 60 per cent slide.
The management of Tantalizers raised several millions of naira from the Nigerian Stock Exchange when it listed its shares in June 2008, only to delist in 2010 after spending fortunes to list and meet up with requirements
Some of the brands are either struggling to keep their heads above the waters or have shut
down.
For instance, outfits like Mr. Bigg’s, Tantalizers, Tastee, Mama Cass, Sweet Sensation, Chicken Republic, King George, Bumfy Burger, Just Chicken, Mr. Food and Golden Gate Restaurant have one sore tale or the other to tell.
THEY LACK CONSISTENT SERVICE DELIVERY- BRAND EXPERTS
Brand and human resource experts have blamed the lull witnessed in the QSR sector on operators’ lack of consistent service delivery, succession plan and poor managerial skills.
The Managing Partner, The Workplace Centre, Mrs. Bola Adeniyi-Taiwo, admitted that while Nigerian entrepreneurs’ tenacity could be rated over their counterparts in other developed and developing nations, it was regrettable that most of the indigenous brands and entrepreneurs could not build irresistible brands.
She said, “The poor level of patronage of some local QSR, which led to their gradual extinction, are connected to the ‘care free’ attitude of either the managers or the chief executives of the brands. When compared to some businesses that invest immensely in great customer service strategies, several Nigerian restaurants still have a long way to go.
“The most immediate and important factor is establishing an orientation of respect. That is one element that is immediately felt by the consumer. This alone can either lead a hesitant customer to make an instant purchase or cause them to walk right out of the door.
“After the respectful attitude is established, then it is vital to anticipate and very importantly focus on the customers’ needs. This is when active listening skills are essential.”
The Managing Director, Singularis Limited, a brand public relations firm, Ms. Lola Omole, alleged that in most cases, most owners of the indigenous firms were either bad managers “or they hire managers that are not capable.”
Contrary to the argument of some operators that lack of fund was the bane to the growth of the sector, she said that their problem was more of implementing required managerial skills.
She said, “The management of Tantalizers raised several millions of naira from the Nigerian Stock Exchange when it listed its shares in June 2008, only to delist in 2010 after spending fortunes to list and meet up with requirements.
“Between 2010 and 2011, the International Finance Corporation also invested $28.5million in the firm and as we speak, the fund does not translate into growth for it. It should not have rushed to the market when bigger firms within and outside the sector were still watching the tides.
“Another factor hindering the growth of the local brands is the inconsistency of their offerings. Most of them, especially Mr. Bigg’s, have been losing market shares because of variations in quality from branch to branch, which has been attributed to its franchising system.”
CUSTOMERS RECOUNT EXPERIENCE
A former patron of Mr. Biggs’ and Sweet Sensation, Mr. Charles Aina, shared his experiences with the QSR outlets.
According to him, the problem of most of the local brands is that they don’t pay attention to the quality of food served because he had bought meat-pie from some of them several times and found it was spoilt.
He alleged, “They microwave the leftovers of the previous day and sell to customers. They sell stale food between 8 am and 11am and they prepare fresh meals after exhausting the stale meal. Most victims would assume they have bad cooks, and don’t forget, the words of mouth are the fastest, cheapest and best advertisement or spoiler.”
A banker, Ms. Kemi Onabanjo, alleged that the firms had lost touch with their Unique Selling Proposition, which she said was their strength and crowd puller when they started.
She said, “The problem started when they started giving franchise to different kinds of individuals, especially those who lacked knowledge of the business. The firms issued franchise to anyone that had money and because the franchisees wanted quick returns on their investment, they began compromising qualities.
“In some cases, they used same workers that served customers’ food in the toilets, for cleaning. Some of the outlets of the affected brands are either dirty or not as neat as they used to be. The kitchen of some are so dirty and the ambience is no longer there.”
WE SPEND 50% OF GROSS PROFIT ON MULTIPLE TAXES, POWER – OPERATORS
However, operators have argued that they have some of the best managers in the continent sailing the boat of the QSRs but they are overwhelmed by some factors that have eaten deep into their finances.
One of the executive members of AFFCON, who pleaded anonymity as he is not permitted officially to comment on the issues, insisted that the harsh economic environment in Nigeria, irregular power supply and multiple taxes imposed by both the federal and state governments were responsible for the ailing state of the industry.
He said, “We use over 50 per cent of our gross profit to cover running cost, compulsory taxes and levies. This is compounded by the overlapping functions of several regulatory agencies.
“These overlapping functions and a lack of coordination among such regulators lead to heavy financial burden on fast food companies. Again, insecurity, inflation, and high interest rates are some of the myriads of challenges having direct impact on our sector.”
