Ethiopia is getting a slice of international fare as Pizza Hut becomes the one of the first major restaurant chains to set up shop in Africa’s second most-populous country. This will bring Pizza Hut’s African footprint up to almost 200.
“Let’s be prudent because in Africa there may be some levels of instability and also when you are opening some routes that take time,” Ewan Davenport, General Manager of Pizza Hut Africa, says.
“But the sky is the limit. At the moment, we are looking at opening at least 50 stores a year.”
Like Davenport says, it’s not the easiest market to crack, so why Ethiopia?
It’s set to become a lower-middle income country by 2025
Ethiopia’s economy is expected to grow second-fastest in sub-Saharan Africa after the Ivory Coast’s. The International Monetary Fund (IMF) forecasts a 7.5% increase in the nation’s economy.
The advent of Ethiopia edging closer to becoming an industrialised nation, and this new-found spending power of its almost 100 million residents is beginning to attract international brand-name multinational companies.
Neighbouring Pizza Hut franchises are already doing well
With outlets in Angola, Djibouti and Ghana looking good, Togo is another consideration in addition to Ethiopia.
A top-performing Pizza Hut location will have “well in excess” of 1000 weekly transactions, says Davenport. Their target is 2200 transactions per week, adding up to an estimated USD1.1 million a year, from each outlet.
The perfect partnership was established
Yum! – Pizza Hut’s Kentucky-based parent company – has always had its eye on Ethiopia, for the above reasons, but local company, Belayab Enterprises PLC was the ideal partner to get the ball rolling.
“It’s still at that explore stage, to find the right partner, to see if the business model will work,” said Bruce Layzell, Yum’s general manager of new African markets back in 2014.
Three years later, the partnership with Belayab has been signed and sealed and the deal sees three restaurants operational within the next six months and another seven over the next three years, bringing Pizza Hut’s Ethiopian footprint to ten by 2020.