Durban - Famous Brands, the owners of Wimpy, Debonairs and Steers, is keeping an eye open for opportunities in the R3.2 billion fast food chicken market despite the failure of its Church's Chicken venture.
Paris Papageorgiou, Famous Brands' financial director, said yesterday: "We operate very successfully in 60 percent of the R8.2 billion quick-service restaurant market but we do not operate in 40 percent of the market, which is chicken."
The company, which also owns Whistle Stop, FishAways, House of Coffees and Brazilian Coffee Shop, earlier this week said earnings for the six months to August would climb between 50 percent and 70 percent.
The company's share price, which gained 7 percent on the news on Tuesday, continued its gains yesterday. It gained 10c to close at R4.70. The hotels and leisure sector finished 0.87 percent stronger.
Papageorgiou said: As a company wanting to expand, we have to continually look at opportunities.
"Previously we were involved in Mighty Pie and Longhorn steakhouses, which did not work out, and we spent a long time trying to get them right. With Church's Chicken we were bold enough to cut our losses quickly."
In 2002, Famous Brands signed a licence agreement with the US-based AFC International to roll out Church's Chicken stores in South Africa and 18 African countries over five years.
But one year after launching 12 stores in South Africa at a cost of R5 million, the group abandoned the project. These outlets are now trading as other group brands.
It was hoped Church's Chicken, which serves deep-fried chicken, would yield a portion of the massive fast food chicken market to Famous Brands. The group was expecting the new venture to contribute 15 percent to the group's operating profit within five years.
Murray Willows, the chief concept officer for Yum Restaurants International, which owns KFC, said chicken consumption had been on the increase worldwide for several years and this growth was partly driven by cost.
The top quick-service chicken restaurants in South Africa are KFC, Chicken Licken and Nando's.
Papageorgiou said the Church's Chicken stores had been positioned in busy urban centres around South Africa but consumers did not take to the taste profile of the product.
"Consumers have certain expectations of chicken products based on what they have been given before.
"We have learnt that barriers to entry in the quick-service restaurant market are high and South African consumers are not just waiting to lap up international brands," Papageorgiou said.
"The focus now is on the bedding down the Wimpy acquisition but in the long term we cannot discount the chicken market," he said.