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Opent letter to Quick Service Restaurants (QSRs),

  • Take Your Menu Online To Become A Sustainable Business
    Opinion Editorial

Dear Quick Service Restaurants (QSRs), Take Your Menu Online To Become A Sustainable Business

Olukayode Kolawole

I read with keen interest a story published by New Telegraph newspaper on Monday September 17th 2018, with the headline, ‘Tantalizers: Operational Costs, Competition Cut Earnings’The publication reported the financials of the company which were released a couple of days ago at its 20th Annual General Meeting (AGM). It is not surprising to read such news about how most companies’ balance sheets continue to remain in red, at least for a number of reasons:
(1) Nigeria is not one of the easiest countries to run a profitable business year in, year out. It is possible, but difficult. You just have to find a smart strategy.
(2) Finding qualified skills can be relentlessly difficult: mostly, under-qualified workers are more readily available and affordable than the right fits; finding a balance is key.
(3) Infrastructure deficit still remains most businesses’ headwind: bad roads and epileptic power supply – the real killers of today’s businesses.
(4) Insecurity in certain regions still hamper expansion plans: Boko Haram insurgency in the north; despite the enormous population in the north, no businesses are keen on setting up their operations or even expanding to the north. But, to be fair, Tantalizers isn’t the only company in Nigeria plagued with these sad realities. There are hundreds of them. Some stay afloat, with no sustainable impact, while others just die a natural death after years of fighting to stay alive. What a paradox!

According to the Chairman, Board of Directors of Tantalizers, Dr. Jaiye Oyedotun, three major challenges rendered the company unprofitable at the end of 2017:
(1) Reduction in credit opportunities.
(2) Weak consumer demands.
(3) Stiffer competition. The chairman made an excellent point so articulately on what the company plans to do in the next financial year to change its fortunes for good:

(1) Corporate revenue – open new stores, remodel existing stores to become more attractive.
(2) Menu recipe revamp.
(3) Franchise programmes intensified.
(4) Improve marketing communications strategy to increase share of voice and mind in the marketplace. These are laudable ideas and a good start to usher in a breath of fresh air towards making the business profitable again. As I can recall, I have been a huge fan of Tantalizers since I was a child. And, I must say, with due respect, that while Mr. Chairman’s action plans seem good for a change, I am not sure he and other board members took into account the changing needs of today’s consumers, and the ever-evolving ways of reaching them. The old tricks (methods) might not be sufficient to fight today’s marketing wars. Legendary marketing experts, Al Ries & Jack Trout in their book, ‘Positioning the Battle For Your Mind’ stated that “to be successful in today’s marketplace, you must touch base with reality”.  So, what are the realities in today’s business environment that can help organisations such as Tantalizers and other restaurants win in this cluttered market?

The 21st century consumers are as nomadic as the Fulani herdsmen; they no longer sit in mortar and bricks restaurants to fetch food. In my opinion, expanding Tantalizers franchise or building new stores doesn’t necessarily guarantee patronage. And the math is simple: what’s the average sales you record yearly from all your existing franchises combined? If the existing franchises are effective, it would have reflected in green on your balance sheets. And the recent AGM where you apologised to the board for a poor business performance would have swung in the opposite direction. Expanding your franchise or remodelling existing restaurants to become more attractive will not do the magic; it will only scratch the surface.

Doing that doesn’t explain why people are not patronising your network of restaurants as they ought to. Tantalizers is one of the oldest Quick Service Restaurants (QSRs) in the history of Nigeria, and honestly, they serve good food. But, do people still eat offline? Yes, a tiny fraction of the QSR market still does. And this tiny fraction doesn’t have the purchasing power you need to scale; you don’t get a repeat purchase or patronage from them as often as you’d expect. Most of the customers who still go to your restaurants to eat are typically parents who like to give their family a treat once in a while – maybe twice in 3 months. They have very limited household wallets. They can’t be your primary audience for sustaining a fast-moving business like Tantalizer, or any other QSR. Mr Biggs used to be a leader in this market. What led to Mr Biggs losing its market leadership is a conversation for another day.

‘Consumers Now Live Online’ Is No Longer News

The real audience Tantalizer or any other quick service restaurant should be targeting are the Millennials: upwardly mobile young executives between ages 21 and 34 years. Online is where they all congregate, live, socialize and network; it’s their new habitat. There is a digital revolution and businesses only survive by tapping into the power of big data which will help them to stay close and understand their market better. This is the age of digital, where almost everything is done online. Leverage the digital intrusion to stay ahead of the competition. Smart businesses today are leveraging the power of eCommerce. The offline market is cluttered already – too many brands saying different things all at the same time. And the attention span of each consumer is extremely short; so is their retention lifespan. So, invariably, brands and businesses are speaking to everyone and to no one. Quite sad.

The real strategy for QSRs will be to take their menus online. There are digital services available in the country that QSRs can partner to drive real growth and profitable revenue, at no cost to them. Offline restaurants such as Ghana High, White House, Ofada Hut, The Place, Bukka Hut, Shiro Lagos, Casper & Gambini, South Eatery, Social House are benefitting immeasurably from the power of digital. It’s common knowledge and a fact that Jumia remains the leader in the provision of digital services in Nigeria, and by extension in Africa, connecting businesses and consumers by giving exposure to the businesses, and helping the consumers save time and money. Opportunities abound for today’s businesses to leverage any of the digital marketplaces that Jumia has successfully created in Nigeria within a span of 6 years.

Simple Is Smart

With the number of Tantalizers restaurants operating across the country, there is no data to prove that setting up new ones in virgin territories will return the company to a profitable path. It is, in fact, a capital driven exercise. If a company is not making as many revenues as it should, then, it must be saving cost. One of the digital services that Tantalizers can leverage to save cost and ensure the company becomes profitable is Jumia’s marketplace for food ordering services. With +1,000 restaurants listed on the platform to connect with consumers, there is absolutely no better way for QSRs to improve their business performance. A lot of smart restaurants are already joining the bandwagon. The service is available in 3 key cities which are also the strategic big cities for most of the QSRs in Nigeria: Lagos, Abuja, and Port Harcourt. What do you need to do? List all your franchise in these big cities on the platform. In fact, ensure it becomes an integral part of the service level agreement (SLA) with your franchise partners to sell on Jumia’s marketplace for restaurants. The question is: what do you have to lose by listing your restaurant on the platform? Absolutely nothing. You even have more to gain, at no cost to you.

The marketplace offers two-pronged advantages: helps consumers to order food from any of their favourite restaurants at their own convenience (plethora of options to choose from and  time-saving), and helps restaurants to connect with their customers online (where they are most of the time, which explains why you are recording limited footfalls in your brick and mortar restaurants). So, it offers a win-win situation for both the restaurants and the consumers.

In conclusion, I am tempted to pose a challenge to the management of Tantalizers: sign up all your restaurants in the 3 key cities between now and December. Let’s begin to measure the impact and track progress in terms of sales 12 months afterwards. There’s something worthy of note: Jumia continues to make a huge online investment to attract all the customers you need to scale, all the customers that are looking to find your restaurants online. Although, there’s also an option of creating your own online platform where you can take orders from customers. But, with the current reality of dwindling credit opportunities and limited working capital, and the heavy investment you will need to commit to driving traffic to your online platform, would you rather go ahead with such investment at this critical time when investors are agitating for dividends? The clock is ticking. The consumers are waiting for their favourite restaurant to be the new addition to a marketplace that is helping them save money and time.

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