Fast Food in Brazil

PROSPECTS

Brands invest in aggressive pricing strategies to keep consumers spending

Fast food companies were affected by the economic difficulties that hit Brazil in 2015 and 2016. Many companies saw declining sales due to shrinking disposable incomes, and even people who could afford to eat out were reluctant to do so.

Delivery shows growing importance to the profitability of fast food

Eat-in saw a decrease in its share of overall value sales within fast food in 2017, due to the growing popularity of takeaway and home delivery. One of the main reasons is that a large proportion of fast food operators in Brazil are located in shopping centres, which witnessed a decrease in the flow of visitors over the later part of the review period.

Delivery is set to continue to support sales of fast food in the forecast period

A large share of fast food outlets in many categories are located in shopping centres; therefore, their profitability was hampered by the decrease in the flow of visitors to those locations during the later part of the review period. Delivery is therefore expected to continue to provide support for brands’ operations in the forecast period, whilst consumers gradually recover their willingness to spend; and consequently start going to shopping centres once again.

COMPETITIVE LANDSCAPE

McDonald’s continues to invest in lower-priced offerings...

McDonald’s continued to lead chained fast food in 2017. Like many other fast food companies, McDonald’s has been investing heavily in promotions as a way of dealing with the economic downturn.

...but also invests in premium products

It is also important to highlight the relevance of the McDonald’s Signature Line. With more premium items in its menu under this brand, and the promotion of extra items, such as cheese, sauce and bacon, McDonald’s managed to retain its value share in 2017.

Habib’s used AI to reduce costs

Habib’s was one of the pioneers in fast food delivery in Brazil, in the early 2000s. Its goal was to deliver to consumers who were not able to visit its stores within 28 minutes.

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