Restaurants Score During World Cup
“People were generally buying more,” John Nicolakakis, the MD of the Roman’s Pizza chain, said last week. “We didn’t get a direct knock-on effect across the group as whole. In areas where stores were located close to a stadium, or where there were a lot of hotels, we did exceptionally well.”On a like-for-like basis, excluding the effect of new stores opened during the year, Roman’s saw a 14% increase in sales last month from a year earlier.
Most restaurants did well.
Famous Brands – the company behind restaurants such as Steers, Wimpy and Mugg & Bean – is due to report better sales at its outlets in an update today.
Still, the reports do not indicate a surge in retail spending, or an overall boost to the economy.
The restaurants and hotels sector is a small overall contributor to the country’s gross domestic product, accounting for just 1% of the total in 2008.
Possibility of post-tournament downturn
While official figures show the food and beverage industry grew in the run-up to the World Cup as well as during the tournament – 4.6% in the three months to April from the corresponding period a year earlier – continued consumer weakness means that the industry may well see a post-tournament downturn.
“One must be cautious,” Standard Bank’s head of South African research, Danelee van Dyk, said on Friday, 16 July.
“This sector has seen its fair share of weakness. It competes for a smaller discretionary spend. It will see some normalisation, post World Cup.”
The hotels and restaurants sector contracted by between 8% and 12% last year, Van Dyk estimated.
Some players are jubilant about their World Cup performance. One of them is McDonald’s SA, which has 135 restaurants. It was growing at a “double-digit” pace on last year before the tournament started, MD Greg Solomon said.
“We added 12 percentage points (to the existing growth) for that five-week period,” he said.
“Our total daily sales were consistently up for 30 days. I’m really over the moon on our performance.”
Other companies played down the effect.
“My overall impression was that we performed a little better than I expected,” said Carlo Gonzaga, CEO of Taste Holdings, which owns Maxi’s, Scooters Pizza and jeweller NWJ.
“With ever-decreasing forecasts about the tourists coming in, we were fairly conservative in terms of what we expected, not only in the restaurants but in the jewellery business.
“But for four weeks in June and 10 days in July, overall we performed better than we thought we would.”