Business | Economy
Home-grown eateries taking bite out of top name brands
In a food retail sector dominated by international brands, the opportunities for home-grown UAE companies to tap into the country's hunger for quick-service food appears slim.
- By Robert Ditcham, Staff Reporter
- Published: 00:00 February 6, 2007
- Image Credit: Press Release
- Quick service restaurants such as the UAE’s Sugoi are holding their own against major international brands.
Dubai: In a food retail sector dominated by international brands, the opportunities for home-grown UAE companies to tap into the country's hunger for quick-service food appears slim.
But Dubai-based Hotbrands International, which began as single outlet in the Bur Juman in 1992, is leading the way for local food-service firms and plans to more than double its presence by the end of the year to more than 100 outlets around the world.
The company currently runs more than 40 quick service restaurants (QSR) under the brand names Shamiana, Sala Thai, Sugoi, Santino's and Magic Wok in Gulf countries Qatar, Oman, Kuwait and the UAE and, more recently, in India and South Africa.
Company chiefs say they are on the verge of breaking into the Saudi Arabian restaurant sector and are eyeing possible franchise agreements with retail firms in Europe and Asia.
They are also planning a foray into the UAE middle market "casual dining" sector by opening fully enclosed restaurant chains Da Shi Dai, Pane Caldo and Haru, which recently opened at the Green Community in Dubai.
"In Dubai we see a lot of five star products and brands at the other end in the QSR sector, which we're heavily involved in already," said Marek Maitland-Walker, head of marketing at Hotbrands International. "There's a big opportunity for good quality mid-market dining concepts where the price of the average check ranges from Dh70-Dh80."
Although Hotbrands International will open most of its new outlets within the GCC, it is also aiming to expand its overseas operation, which it runs through partnerships with master franchise companies such as Dabur Foods in India.
"We are getting enormous interest in the Europe and the UK is right on the radar. We'd like to take that on in mid to late 2007. We think Shamiana and Sugoi will do very well there," said Andrew Lester, chief operating officer for franchising at Hotbrands International.
"The Indian component is also very exciting. We've signed six outlets in the four days there, in addition to our existing six."
Although the company's expansion in the UAE does not depend on securing franchise partners, they still face the challenge of finding good mall space at affordable prices.
"We get thrown some deals and the numbers just don't add up for us, but our competitors are willing to take it. For our business this is the most significant barrier to growth. The same thing is also happening in India - the market is over-hyped," said Lester.
Lester said company chiefs originally invested in the QSR sector after market research revealed growing demand for quick, but healthy, ethnic meals with better quality than fast food burger chains.
He added: "We're always looking to anticipate the public's changing tastes and constantly strive to develop new food concepts."
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