Limited-Service Restaurants in Nigeria

PROSPECTS

Widening internet access via smartphones boosts online sales

Nigeria is increasingly connected, with growth in the number of internet users linked to an increase in the ownership of smartphones during the review period. These trends will also benefit limited-service restaurants over the forecast period, although despite dynamic growth for online ordering its share is expected to remain niche at the end of the forecast period.

Third party delivery platforms OPay and Jumia Food set to offer speedier services

Limited-service restaurants are likely to benefit from an increase in the coverage of third party delivery platforms in the forecast period, while there will also be strong growth in partnership agreements offering speedy deliveries. OPay’s OFood delivery app and Jumia Food will be among the players driving this trend.

Rising disposable incomes to boost sales of limited-service restaurants

Due to challenging economic conditions in the middle of the review period, limited-service restaurants saw transaction volume decline, while returning to faster growth from 2018. However, with an improvement in the economy and a rise in disposable income, this channel is expected to grow strongly over the forecast period, with a growing number of consumers able to afford regular trips to limited-service restaurants.

COMPETITIVE LANDSCAPE

Domestic chains strong as Chicken Republic leads and Mr Bigg’s remodels

Domestic players are strong, with Food Concept’s Chicken Republic leading chained value shares due to its wide national presence, ongoing expansion and focus on the use of local spice blends that appeal to consumers. The company also benefits from an adroit pricing strategy, offering a range of prices to appeal to all income groups.

Young urban consumers show growing appetite for global brands

While domestic chains remain strong, there are signs of young urban consumers having a growing appetite for global brands, which not only offer novel menu options but are also often viewed as offering higher quality. Rising disposable income levels are also enabling more consumers to afford to eat at such brands.

Many domestic players struggling but investment could offer hope for forecast period

While long-standing domestic chain Mr Bigg’s remained the leading chain in terms of outlet volume in 2019, the brand lost share towards the end of the review period. This brand was a pioneer in limited-service restaurants in Nigeria, with its popularity linked to its focus on traditionally popular local recipes.

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