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Abstract
EXECUTIVE SUMMARY
Sector growth slows down
Although consumer foodservice (CFS) in Bulgaria marks another year of growth, it was not as dynamic as that of the review period. This is a result of many factors that have a huge influence on the economy. First of all, consumer foodservice as a whole is close to reaching maturity and the possibilities of developing exclusive areas of the market decrease by the year. To some extent the development of the CFS market was further held back by the record high oil prices and the countless government laws, which aim at raising the level of the industry to EU standards.
Specialist coffee shops show a remarkable performance
Specialist coffee shops performed notably well in 2005. Since Onda Coffee Break represented the whole subsector it is only this company to be credited with the highest growth in the industry. Starting from nothing in 2003 it managed to develop a completely new idea for Bulgaria and turn it into a profitable business. The milestone of its development was the opening of three more outlets in 2005 - all located at strategic locations in the capital of Sofia. Despite the relatively high prices, Onda Coffee Break continues to attract people with its innovative coffee, tasty food, excellent service and modern interior. Its performance was further facilitated by the lack of competition in this market niche. Since foreign companies are expected to enter this market in 2006, Onda Coffee Break will have to defend the brand name and the positions that it already conquered.
Pizza offering outlets keep growing
In 2005 pizza was the food type that marked the highest growth compared to 2004 - in full-service restaurants, fast food outlets and in the 100% home deliver/takeaway business. Pizza full-service restaurants in particular performed well - independent outlets continued to expand and their popularity increased while chained outlets did not undergo any progress at all.
Among the independent outlets there are a few that stand out - Ugo, Krivoto and Don Domat, which opened new outlets in 2005 for the first time since 1998. Although none of them plans to expand the business outside Sofia, all of them battle for customers in the capital city. They all announced they would open more new outlets so over the forecast period they are very likely to evolve into chains and become major players on the market.
Burger fast food collapses
2005 was definitely one of the most unprofitable years for burger-serving fast food outlets. McDonald' s, which suffered a tough year around the world, primarily caused the decrease in value sales and transactions in the subsector. As for the Bulgarian market its popularity decreased after reaching its peak earlier in the review period.
In addition, other fast food outlets, both chained and independent did not show any progressive performance at all. The main factors determining this trend are increased disposable incomes and consumers switching to visiting full-service restaurants (FSR).
Future seems promising
The prospects for the consumer foodservice industry in Bulgaria look bright and interesting. Although at slower rates, the market will continue to develop and value sales are expected to further grow. No doubt the competition will be the main driving force but other factors will have influence too - like the EU accession for example. The potential in cafes/bars, fast food and 100% home delivery/takeaway (HDTA) are likely to undergo more progressive development than other categories. Hence growth will be rather dynamic during the forecast period.
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