Nando's already has an agreement with Durban's eThekwini municipality to supply the city's Fan Fest, as official Fifa fan parks are called, as well as two city-run fan parks in Umlazi and KwaMashu. It was in talks with other cities, Nando's Southern Africa CEO Noel Boyle said Wednesday, 14 April 2010.
Nando's “have effectively been referred by Fifa to those cities”, Boyle said. “If we were able to conclude successfully with every municipality it's probably worth potentially as much as another 2 weeks' (sales) for the group as a whole. It's probably worth another 5% (to annual sales).”
It is not yet clear who will cater to the captive audience at the nine stadiums. Fifa yesterday, with just 57 days until kick-off, named Brazilian food company Seara as a sponsor of the tournament.
Bidvest and Compass, two companies with large local catering operations did not respond to request for comment.
Nando's, with 260 restaurants in SA — only up to 80 of which the company said would be directly affected by World Cup demand — has more spare capacity to provide catering at the 10 official, and numerous other, fan parks than smaller rival McDonald's, which has only 132 outlets in the country. McDonald's marketing and communications director Sechaba Motsieloa last month said the company did not want to risk compromising its ordinary operations by prioritising extraordinary World Cup operations.
“We're going to be in a position to pull 1 or 2 staff members from restaurants that are not going to be affected by the World Cup,” Boyle said. “The restaurants that are closest to the stadiums, closest to the tourist centres — we're not going to pull staff from those. We'll take people on a rotational basis from restaurants that are quiet at that time of year.”
Nando's, which will limit its product range at the fan parks to burgers, chicken and chips, will not be able to brand any of the products sold. Nor would it run to a great profit, Boyle said.
“But (given) the complexities of doing that — equipment in place, training extra staff — it's not particularly profitable for us.”
This raises the question why take on a low-margin business activity that will not even help build its brand? The same question can be asked of brewer SAB, which will sell unbranded Castle beer at the ten Fan Fests. Boyle said locals would recognise the chicken as being Nando's. A further benefit would come from giving staff the chance to be involved with the World Cup, he said.
One observer questioned the benefit to either company from selling product without branding rights.
“I'm not entirely sure I see any upside at all in this,” said Chris Gilmour, a consumer-industries analyst at Absa Investments. “It's taking up the slack that somebody else doesn't want. It's no use to them if they can't brand it.”
Fan parks aside, Nando's expects a 15%-20% boost to sales at its existing restaurant business. While there would be a “significant” uplift at outlets close to tourist-heavy areas — airport restaurants would go into 24-hour operation — other outlets were likely to see a decline in sales as people stayed off the roads to avoid the congestion, Boyle said.
To counter this, the company is planning a home-delivery service to cater for people staying home to watch the matches.
Source: Business Day
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