Following growing purchasing power in the country and increased private equity investments, the Nigerian fast food industry experienced spike in growth in 2013, grossing a total of N230 billion in turnover up from the N200 billion it did in 2012.
Based on the rebased GDP figures, the accommodation & food services sub-sector contributed about 0.47 per cent of the nation's total value of goods and services compared to 0.55 per cent in 2012.
The lower contribution, according to a report by
The report however projected a 15 per cent growth for the fast food industry in 2014.
"Nevertheless, we expect the fast food industry's revenue to grow by about 15 per cent to Â'¦265 billion in 2014 as new restaurants are opening (both local and indigenous) to meet the demand of the growing population of the fast food target market which include individuals within the 25-45 years bracket," said the report.
The report also stated that the fast food target market accounts for about 30.5 per cent of the population, approximately 51.8 million persons.
Tagged, "2014 Industry Reports," the report exposed several challenges facing the food, telecommunication, agric and other important sectors of the Nigerian economy.
The report revealed that one of the problems facing the fast food industry is over reliance on imported goods.
"Most fast food raw materials with the exception of perishables such as vegetables are imported. However, the supply of these food items in
It added: "In 2012, the Federal Government announced a ban on rice imports effective 2015, in addition a levy on rice (brown, semi and wholly milled rice) was set at 100% effective
This, the report added, has led to high prices for the Industry's raw materials.
"We estimate that raw materials (food & beverage) made up about 45 per cent of the Industry's costs, followed by property (rent, maintenance & depreciation) at 18 per cent and energy at 15 per cent. In terms of revenue generation, proteins (meat, chicken, and fish) and traditional cuisine contributed about 30 per cent and 20 per cent respectively of total sales."
In spite of these challenges, it stressed that the industry remains resilient with operational efficiency and service delivery as key to the fast food restaurants' ability to generate revenue in a highly competitive business.
"In addition, menu innovation, food price and location (catchment area) is important to the success of a fast food industry. We thus maintain a stable outlook for the Nigerian fast food industry as it continues to grow, attracting international fast food players such as McDonald's and investments from private equity firms," it stated.
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