Spur has been identified as SA’s leading restaurant brand, according to the results of a survey conducted by Acentric Marketing Research. The survey was conducted in the first quarter of 2012 and included 21 restaurant-chain brands. The survey was conducted amongst a scientifically selected sample of 364 online panelists living in the metro regions, and has a margin of error of 5.2% (see technical note).
In total, 21 restaurant brands were ranked according to the ABM (Acentric Brand Model) Index. The top five most powerful brands were identified as: Spur with the largest ABM index score of 15%, closely followed by KFC (14%), Mug & Bean (12%), McDonalds (9%) and Woolworths (8%).
“The ABM Index is a proven index of brand equity, which strongly correlates with market share (0.9 correlation). The ABM Index in essence, is based on the mental associations each brand elicits in the consumer’s mind. Fifteen areas were covered, grouped into six major performance topics. These included: Product (food), service quality, value for money, functional benefits, image and patron enjoyment.” says Craig Kolb, Principal Consultant at Acentric Marketing Research.
“In general, across all the brands, the most important drivers of brand equity identified in the survey, were how the food tastes and value for money. In tough economic conditions, restaurant owners have been hard pressed to deliver the same quality without raising prices, and those that manage to still deliver palatable dishes at the right price are likely to win share.” says Kolb.
The restaurant industry is a very competitive industry, with no one truly dominant player. “SA’s restaurant chains have a low Herfindahl index of approximately 0.1, meaning that there is very little concentration of power in terms of market shares. Loyalty is also weak; the typical patron goes through 7 different brands in a month. Very few are 100% loyal, for instance only 0.13% of Spur customers are estimated to be 100% loyal in a month.” says Kolb.
Amongst those who go to a restaurant /take-away at least once in a month, the typical visit frequency is 20 times per month, at an estimated-average cost of approximately R1,000 per month. “In the first quarter of 2012, restaurant industry revenue was just over 9 billion Rand. The industry grew on a quarter-on-quarter basis over 2011, though fast foods grew at a much larger rate than restaurants.” says Kolb.
Technical note: A random sample of respondents was drawn, stratified by age and gender from an ISO certified panel. Post-weighting was applied to correct for non-response bias. In total 364 interviews were used in the analysis, providing a 5.2% margin of error at a 95% confidence level.