South Africa's QSR (Quick Service Restaurant) industry has been through a rollercoaster year, juggling consumer budget constraints, soaring inflation, and the operational strains of load shedding. With fast-food prices reaching limits that even loyal patrons are struggling to accept, QSRs find themselves facing fierce competition from existing rivals but also mounting competition from grocery retailers, small-box stores and coffee shops.
Traditional QSR is under pressure from all angles:
- Inflation is driving fast-food prices beyond what patrons can swallow
- Eating habits are changing
- We are seeing channel blurring between QSR and fast casuals as they compete for ‘share of stomach’
- An increase in coffee shops and small box stores
- SA’s grocery retailers compete with QSRs for a slice of the food-on-the-go sector
“Quick service restaurants have experienced solid growth in 2023, despite constrained consumer spending,” says Sandy Sutton, Retail Analyst at Trade Intelligence. But it is the same food inflation that has eroded spending power that has supported QSR growth.
Local QSR operators remained resilient and navigated the challenges by balancing price increases and meeting customer demand for value. However, South Africa’s top QSRs have not been immune to the effects of the current stagnant economy, as indicated by the latest consumer penetration data: 9 of the top 10 QSRs and fast-casual restaurants in South Africa have declined in consumer footfall in the past two years.
Famous Brands, which owns Debonairs Pizza, Steers, and Wimpy, has closed 41 locations over the past six months, citing shifts in consumer behavior and demographic changes in certain areas as reasons for these closures.
Digital transformation has spurred creative developments, enhancing convenience, shopper engagement and operational efficiency. “Ongoing innovation in digital technology is driving consumer engagement, enhancing convenience and the shopper experience,” says Sutton. “Leading in consumer-centric innovation will be key to success in the QSR sector.”
As South Africa’s QSR industry faces mounting pressures from the economic climate and evolving shopper behavior, resilience and innovation have become the keys to survival. The sector’s ability to adapt—whether through value-driven offerings, leveraging digital transformation, or navigating the increasingly competitive food landscape—will define its path forward. For QSR operators and their suppliers, the opportunity lies in finding creative ways to thrive in this highly pressurised market.
Trade Intelligence’s Food To Go report offers an in-depth look at the QSR landscape, featuring global and local trends, case studies, and shopper insights to help stakeholders navigate strategies for 2025 and beyond. With shifting consumer dynamics and increasing competition, the insights are timely for QSRs and their suppliers looking to stay competitive in South Africa's dynamic QSR sector.