After two failed attempts, Pizza Hut is again preparing to start operations in Argentina, the only South American nation where the fastfood chain does not currently have a presence. Pizza Hut’s two previous attempts (1980 and 1992) were both cancelled because growth and profit goals were not met. At present, the parent company is considering two options for its Argentinean operations: to establish a franchise in partnership with a local company, or to use direct foreign investment.
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Management stated that the chain plans to open its first restaurant during 2001 and that it will be located in a city other than Buenos Aires. The restaurant chain hopes to gain a stable foothold before venturing into the highly competitive Buenos Aires market. Roughly three million people live in the capital and another five million commute there to work every day. At present, Buenos Aires has an estimated 2,500 pizza restaurants.
Not only is competition intense in the capital, but 30 straight months of economic recession have taken their toll on the restaurant industry. Rising unemployment and the high cost of living are hampering consumer spending in the food sector. Nevertheless, wages in Argentina are relatively high by Latin American standards, leading to the expectation that eventual economic recovery will boost consumption of Pizza Hut products.
By Steve Lewis, just-food.com correspondent
