The closure of 15 McDonald’s outlets in South Africa has other players in the thriving leisure food industry perplexed by the move.
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This follows an announcement earlier by the corporation’s Chicago head office to close 175 under-performing stores outside the USA.
McDonald’s has spent over R500m (US$54.7m) since opening shop in South Africa in 1995. It is believed the company has also put on hold plans to open new stores.
Terry Reese, president of McDonald’s SA said the company had absorbed 60% of employees into the company’s remaining 89 operations around the country. Fewer than 300 employees were affected and the company would assist them.
A leading competitor, Wimpy, is opening on average 30 new restaurants a year and recording positive trading. It also operates in Zambia, Botswana and Namibia.
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By GlobalDataWimpy MD, Darren Hele, said: “We are perplexed about the whole matter because the entire casual dining segment of the market is extremely healthy.
“According to our information there is a concentration of stores closing in Natal, which is strange especially at the onset of the very busy summer holiday season.”
Steers Holdings, another major player in the burger and fast food business, echoed these sentiments. The group, which also has the Debonairs Pizza, Fishaways and newly-opened Church’s Chicken franchises in South Africa, said they were experiencing both organic and numeric growth.
“We have been having an extremely positive growth period over the past 12 to 15 months,” said chief operating officer, Kevin Hedderwick.
