The market remains dominated by three international chains – McDonald’s, KFC and Pizza Hut.
“The market has been growing fast in the past few years. I don’t know if it can continue like that in the future, but the sure thing is that there is still potential,” says Daniel Boaje, the Romanian executive who runs the local operations of McDonald’s. He is also the minority shareholder of the company that operates the fast-food chain as a franchisee.
The chain currently numbers 70 restaurants and will open two more by yearend. The company will step up expansion in 2018 at a rate of seven restaurants a year for a total of 95 in 2020.
McDonald’s, which entered Romania in 1995, has been the leader of the local restaurant market from the beginning, and last year was its best in terms of sales, more than RON600 million for the first time. This means the fast-food chain has a share of 7% of a market put at RON8.5 billion. The analysis considered only those companies operating under the `Restaurants’ NACE code, which submitted their financial reports for 2016. The market rose by 16% compared with 2015 last year and doubled compared with 2008.
Back then McDonald’s was the market leader, too, and its market share stood at more than 10%, which means the market grew faster than its revenue.
The growth of the restaurant market came as a result of the expansion of the major local and international players and of the arrival of new names. Trade Registry data show the market to have been dominated by Premier Restaurants (McDonald’s), US Food Network (KFC) and American Restaurant System (Pizza Hut and Pizza Hut Delivery) in 2016. The three posted RON1.2 billion revenue, which means 15% market share together. The restaurant market is one of the most fragmented in Romania’s economy, though not as much as the café and bars market, whose market leader only has 2% market share.
The development of the economy and of the purchasing power on the one hand and the growth of tourism on the other led to the development of the restaurant market. One such example is the arrival of two major US groups – Taco Bell and Sbarro. They both arrived via franchisees, as foreign restaurant brands usually do because Romania is much too small for a direct presence.
Besides major international chains, Romania also has its own major players – City Grill, Trattoria Il Calcio and La Mama. (EUR1=RON4.6431)
(English version by Loredana Fratila-Cristescu)