Why Steers is shutting down two branches in city centre
South African fast food franchise Steers has closed two of its Nairobi city centre branches.
The Steers franchise, locally owned by Hoggers Limited, closed shop at its Wabera Street and Kenyatta Avenue branches following lease-term disagreements and change of business strategy.
Hoggers currently runs Steers, Debonairs Pizza as well as Ocean Basket franchises in Kenya.
“For years, Wabera Steers has been our best performing Steers Branch. As rental rates continued to increase, we planned to renovate this outlet including a Debonairs Pizza as well. This plan would have required additional investment of Sh50 million and, before we could invest in the renovation, we needed to ensure that our lease was renewed for a sufficient period of time to be able to recoup the investment. Unfortunately , we were unable to agree on terms with the landlord and so decided to focus on securing a replacement location,” said Hoggers Limited managing director Azam Samanani.
The Wabera Street premises is now occupied by Somali cuisine outlet Café Pronto.
According to Mr Samanani, the barely two- year-old Kenyatta Avenue branch did not have adequate seating to meet customer demands.
“The Kenyatta Avenue site only had 40 seats, and this simply was not large enough to accommodate the number of customers who wanted to be seated at any one time.”
It was therefore “more prudent” to look for a larger location, he said.
Steers operates on a mix of company-owned and franchise partners in Kenya— where third parties buy rights to operate a Steers store from Hoggers.
There has been increased investor activity in the food industry in the past four to five years with local and international franchises stepping up competition for old brands.
Chicken Inn, Java House and American chains Hardee’s, Burger King and Kentucky Fried Chicken (KFC) have all opened outlets in Nairobi with plans to set up additional branches in the capital and other urban centres.
Hardee’s has announced plans to launch 15 new branches in five years.
The fast food chain opened its first Kenyan outlet, which is also its first shop in sub-Saharan Africa, at the Jomo Kenyatta International Airport departure lounge in October.
KFC plans to open additional branches in Nairobi after venturing outside the city by opening new outlets in Nanyuki, Nakuru and Kisumu early December.