Chicken Republic outshines others in battle for market share

Chicken Republic, one of the pioneers of the quick service restaurants (QSR) industry in Nigeria, recorded the most sales among its peers last year despite surging inflation that dampened consumers’ purchasing power.

BusinessDay analysis of the latest foodservice data from Euromonitor International, a global market research provider shows that Chicken Republic’s sales value was the highest at N60.9 billion, followed by Sweet Sensation’s N4.58 billion and Mr Bigg’s at N2.68 billion.

Tastee Fried Chicken and Tantalizers had N2.59 billion and N2.49 billion worth of sales respectively.

“The Nigerian limited-service restaurant category is highly fragmented. We are seeing different brands focus on deals and promotions to boost their sales. For example, Chicken Republic offers ‘buy one get one free’ meals to entice consumers,” Thomas Verryn, senior research manager at Euromonitor International, said.

He said the company’s partnership with the Glovo app for more efficient food delivery has also played a factor in the growth. “Lastly, the company continued to expand its footprint.”

Uchenna Uzo, professor of marketing and faculty director at Lagos Business School, said Chicken Republic’s quality of food, taste, and variety are better than some retailers in the fast-food chain.

“Remember that they are positioning themselves as chicken experts. And in terms of understanding the Nigerian palette, they have been consistent in ensuring that in the different places where they serve, people are having the same taste and experience,” he said.

“They have also been strategic on where they locate their brands as they are going for high-value areas and giving people the varieties that they need as opposed to others who just put locations everywhere, especially in areas where there is less traffic,” he added.

The Nigerian fast-food chain and franchise that specialises in chicken recipes, especially fried chicken was founded by Deji Akinyanju in 2004. It opened its first store in Lagos in 2004 and has so far opened over 150 locations across Nigeria and Ghana. The company is a subsidiary of Food Concepts Plc, a Nigerian food-based company.

In 2016, Chicken Republic started with a combo meal tagged ‘Refuel Meal’, which consisted of jollof or fried rice and a piece of chicken for N500. It was one of the restaurants that started the combo meals when Nigeria was hit with an economic recession with a significant impact on consumers’ wallets.

Three years later, Chicken Republic rebranded its image and used the ‘Sell-on-the-Go’ marketing strategy by setting up Express kiosks to boost sales and improve customer service.

“QSRs are going retail as much as possible to offer more products and services. There is also the need to go beyond the mega outlets because it is expensive and difficult to run. It is cheaper to run small kiosks,” Ayorinde Akinloye, a Lagos-based investor relations analyst, said.

The Nigerian food industry is estimated to be worth over N1 trillion and is also one of the best-performing in the country, according to the Association of Fast Food and Confectioners of Nigeria.

Data from Euromonitor International shows that the sales volume of restaurants in the formal market increased to 87.8 million in 2023 from 86.7 million in the previous year, while the value grew by 10.4 percent to N260.5 billion.

“Low consumer purchasing power impacted sales transactions in 2023, forcing most chained quick service restaurants to offer deals and promotions. Chicken Republic, for instance, is offering ‘buy one get one free’ meal deals, while Mama Cass is offering a 20 percent discount on various meals,” the report said.

BusinessDay reported last year that retailers in the fast-food industry were devising several ways to entice consumers amid weak demand.

Between last July and August, some retail outlets did trade promotions such as discounts, ‘Buy One, Get One Free’ and free deliveries to woo consumers.

“It is a reaction to the current realities in the economy. The high inflationary pressures, which are already reducing consumption volumes, are making retailers do direct promotions to drive or increase volumes,” Tola Chukwu, a Lagos-based consumer goods analyst, said.

Trade promotions are marketing activities or campaigns conducted by brands to boost sales and profits, expand their customer bases, and encourage customers’ loyalty.

They are usually attractive incentives that come in the form of discounts, free products, price protection, and other forms of compensation.

Over the past nine months, the inflation rate in Africa’s biggest economy has accelerated to a record high largely on the back of the Federal Government reforms including the removal of petrol subsidy and naira devaluation.

Nigeria’s headline inflation rate rose for the 14th consecutive time in February to 31.70 percent from 29.90 percent in the previous month, according to the National Bureau of Statistics.

Food inflation, which constitutes 50 percent of the inflation rate, rose to 37.91 percent from 35.41 percent.

Authors of the food service report revealed that many chained limited food service restaurants continued to increase their outlet numbers in 2023 in order to meet the needs of consumers in untapped markets.

“Kilimanjaro, for instance, has expanded into Kaduna in the north of the country, whilst Burger King opened six outlets in Lagos and Abuja, and Eat N Go opened a new outlet in Jos. Other brands that have expanded in 2023 include The Place restaurant, and the largest player and leading brand, Chicken Republic, which has over 300 outlets in Nigeria,” they added.

News Credit: Business Day