African Fast food outlets feel rate hike
Durban – Fast food franchise companies are feeling the pinch of interest rate and food price hikes with rising input costs, a drop in spending per customer and a fall in the number of customers.
This is in stark contrast to the sector’s optimism more than six months ago, when it said it did not expect interest rates to hit business.
According to Statistics SA, the producer price index increased by 1.1 percent month on month in May, rising 11.3 percent year on year.
Food manufacturing was one of the main contributors. Its inflation rate rose from 12.6 percent in April to 14.2 percent in May, but the rate for beverages dropped from 10.6 percent to 5.8 percent.
Spur managing director Pierre van Tonder said: “We have not had a decline in customers, but there has been a decline in the items that our customers buy. They do not go for big, expensive meals as much as they used to.”
He could not elaborate because Spur, which is listed on the JSE, was in a closed period. It expected to shed more light on performance at the end of next month, when it will release interim results.
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