Ukrainian Fast Food Sector to See Expansion of Local Players, Forecasts Euromonitor International30 Nov 2012 • by Natalie Aster
In 2011, Ukrainian consumer foodservice continued its recovery and demonstrated strong current value sales growth as well as transactions growth, while the number of outlets marginally declined. Nevertheless, the overall performance can be generally described as positive. The recession forced out non-profitable outlets with weak management and gave way to players with effective strategies. In spite of the fact that unit prices continued to grow in 2011, consumers could yet benefit from the recession due to the increased number of attractive promotional offers based on specially-priced day parts, holidays and seasonal menus. All in all, this brought consumer foodservice to a new level of development, characterised by more fastidious consumer demand and more intensive competition among players.
According to the report “Consumer Foodservice in Ukraine” by Euromonitor International, in 2011 Burger King, Subway and KFC completed the procedure of official registration of their brand attributes and actively held negotiations with local partners. Lithuanian chain Cili Pizza declared its intention to re-enter Ukrainian consumer foodservice after its first unsuccessful attempt in 2007. In 2011, the company was actively looking for master and single franchisees.
Consumer Foodservice in Ukraine
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Ukrainian fast food will also see expansion of local players in the short-term. In 2011, it witnessed the launch of a new chicken fast food brand called Kryla. Its brand owner is Mironovsky Khleboprodukt VAT, the biggest Ukrainian chicken producer and a very successful and fast-developing company. Massive support is likely to make Kryla a very competitive brand in future.
The arrival of these giants will obviously make the category grow. Moreover that some of them might start during 2012 UEFA European Football Championship. Fast food is projected to record a constant value CAGR of 5%, which will make it the second best performing category after self-service cafeterias.
Nonetheless, fast food will face certain obstacles. The aspiration of many players to expand their franchising network will be seriously retained by an unstable Ukrainian economy and imperfect legislation. These obstacles will first of all deter transnational companies. The expansion through own outlets remains a more reliable way of development in terms of investment protection. In a longer perspective, the growth within fast food will slow down with the end of the recession. Higher incomes will allow consumers to switch to full-service restaurants, cafes/bars, coffee shops and other higher positioned outlets. Growing concerns regarding healthy food and anti-fast food propaganda will negatively impact on the category’s growth rates.
More information can be found in the report “Consumer Foodservice in Ukraine” by Euromonitor International.
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