Germany: Second Best Growth

 
Germany’s 100 biggest restaurant chains/companies noted revenues growth of 5.7% in 2007 (2006: +7.6%; 2005: +4.6%) – the second best result since 1999. Thanks to the economic upturn and a greater propensity to consume, the Top 100 generated revenues of almost €10 bn from their 16,000-plus outlets.
 

 
Three future-oriented statements:

• “Customer proximity will be an increasingly important factor for success. However, this does not mean the staff behind the counter but top managers –the people responsible for running the system.”
• “Although competition will undoubtedly remain fierce, we have complete confidence in our brand and system – the ideal way for success.”
• “Quality is essential and still more important than innovations. And this is a good thing because, at long last, quality can cost a little extra.”

Germany still has one of the most fragmented foodservice markets in West Europe – completely different to, for example, Great Britain. According to the German Statistical Office in Wiesbaden, Germany’s restaurants, cafés, pubs, etc. registered a nominal fall in revenues of 2.3% in 2007 (which is, by the way, a significantly worse result than that of the hotel sector). Against this background, the results of the Top 100 with an increase of 5.7% are indeed excellent. Without doubt, the front-runners leap faster, further and better than the bulk of the sector. In the long term, this difference in development leads to the familiar structural changes per brand, per system, per quality – per multiplied formula for success. Quick-service restaurants are the playmakers of the professional foodservice sector and have been for many years. They account for more than half of the Top 100 in terms of volume. In this segment of the market, excellent performance when it comes to coffee drinks has become a strategic must.
 

 
The most important influences on quick-service restaurants come from coffee bars, fastcasual concepts and bakery cafés. McDonald’s has been the frontrunner since 1983, and has increased its lead steadily over the years. 4.9% growth in 2007, including a 4% plus in same store sales. Remodelling is the current buzz word at McDonald’s with over 200 conversions, including the integration of 184 McCafés as shop-in-shop solutions, in 12 months. The total is expected to have risen to almost 500 by the end of this year.Following 133 new openings in twelve months (an absolute record), Subway has now moved into the Top 10 for the first time. Burger King opened 82 new restaurants.
 
Thus, the bulk of the Top 10 winners by additional revenues are quick-service players:

1. McDonald’s +€126.0 m
2. Burger King +€65.0 m
3. Subway +€36.0 m
4. Starbucks +€23.0 m
5. LSG +€20.0 m
6. Tank & Rast +€20.0 m
7. SCK Skyline Catering +€20.0 m
8. Ikea +€19.0 m
9. Vapiano +€18.5 m
10. Kuffler +€11.9 m

15% of the top companies are global players – they generate 54% of total revenues. They are supplemented by major national names, as well as regional companies and top performers incertain big cities. Franchising is clearly gaining ground and most brands are expanding faster and faster using this contractual marketing solution.
 

 
| 22 October 2008 |