Kentucky fried chicken, a division of yum brands recently entered into the Nigerian market with 15 branches already established. They serve a wide variety of food that is loved by the Nigerian populace. Domino’s and Debonairs pizza are also popular in Nigeria, although they serve mostly pizzas, they have other products like melted Choco pockets, chicken stuffed cheesy bread, chicken wings, cheesy bread, pepperoni stuffed cheesy bread and a host of others.
The increasing growth and proliferation of fast food restaurants in Nigeria can be attributed to ever increasing demand for its services for consumers to meet and cope with the busty and rigorous lives. Increased urbanization with roughly half of Nigerians residing in cities and the growth of the middle class, and discerning tastes for western – style food by the middle class. The growth in the industry has prompted major foreign western franchises like Nando’s and Kentucky fried chicken, domino pizza and others to come into the Nigerian market in recent years.
The Nigerian fast food market even though it is growing, is not yet ripe. it needs a big player such as KFC, McDonald’s, burger king etc. to establish itself and take a foothold with new innovations . They can dictate price as a result of economies of scales and steal customers from already established companies in Nigeria. This would also help the industry as a whole because there would be promotion of efficiency and it would make price economic.
Although in establishing, they are risks that might be faced. These risks include:
- Cases of litigation and health claims filed against fast food owners-operators are increasing daily. In response to this, stakeholders in the industry are now faced with the need for proper reappraisal and realignment of their operators in line with the laid down procedures and guidelines targeted at increasing life expectancy.
- Practitioners now strife to offer a very broad profile because of changing consumer preferences for health issues. The growth and survival of the industry in Nigeria is said to be currently challenged by:
- Poor infrastructures and lack of basic public utilities
- Little disposable income to spend on what most Nigerians see as luxury food
- Inadequate food processing facilities
- Multiple Taxation
The greatest challenge to the IEO dominated by McDonald’s worldwide in Nigeria is that there are a plethora of road side informal small time cooks or canteens which not only cuts into the market share of the organized sector, but also threatens public health and the environment.
BARRIERS TO ENTRY
Based on the provision of the law such as GON Act of 1993 (Amended) and related products (registration) Act no 20 of 1999 and other accompanying guidelines; no food item or product can be manufactured, imported, exported, advertised, distributed or sold in Nigeria unless it is registered by the National agency for food and drug administration and control (NAFDAC). They serve as protection measures for promoting public health and restrictions as a result of their compliance (David 2009).
Foreign companies seeking to enter into Nigeria need to register its trademark to grant exclusive rights to the use of registered mark for a specific or class of products. This is regulated by the Trade marks registry of the federal ministry of commerce in Nigeria. The 1998 copyright decree based on wipo standards and USA copyright laws help restrict exportation’s, counterfeiting, importing, reproducing and exhibiting a firm’s product without copyright permission from owner (David 2009)
Government grant tax holidays of 5 to 7 years to foreign organizations and even exempt all taxes from companies operating in the Nigerian export processing zones including import and export duties. (Nigerian high commission London 2011)