Fast food on the steppe

By bne IntelliNews July 25, 2011

Clare Nuttall in Almaty -

Americana Group has brought several fast food franchises - KFC, Pizza Hut and most recently Hardee's - to the Kazakh market. But unlike Russia and the western part of the Commonwealth of Independent States, Kazakhstan has yet to see the arrival of McDonalds and its big rival Burger King.

CKE Restaurants, owner of the Hardee's brand, announced on July 7 that two Hardee's restaurants, the first burger quick service restaurant chain from the US to enter the country, had opened in Almaty. The firm said these were the first of 12 restaurants that will be opened in Kazakhstan over the next five years. "Kazakhstan is a market with tremendous growth potential and we wanted to take this opportunity to employ a 'first-mover' strategy in our segment," says Andrew Puzder, CEO of CKE.

Kuwait-based Americana Group, which is operating the restaurants, already has 215 Hardee's restaurants in the Middle East and Africa. It now plans to expand to selected Central and West Asian countries.

As incomes have risen in Kazakhstan, the restaurant scene is evolving in a similar way to the rapidly developing retail sector. Average annual incomes have risen from just $700 per capita in 2004 to almost $10,000 in 2010, causing a leap in consumer spending, despite a slowdown during the recent crisis. BMI forecasts that per-capita spending on food will increase by 51.4% between 2010 and 2015, while soft drinks sales will increase 61.1% in the same period.

Kazakh fast food has until recently consisted of small-scale independent shashlik bars, ethnic Dungan cafes or kiosks selling samsi - triangular pastry parcels stuffed with meat or cheese. The international chains tend to be located in city centres or high-end malls, rather than bazaars and bus stations.

But as the market grows, two famous American brands are notable by their absence. Kazakhstan has never had a McDonald's, although the burger chain last year celebrated its 20th anniversary in Russia, having opened its first restaurant in Moscow back in 1990. Local rumour is undecided over whether the company backed away from Kazakhstan after coming face to face with official corruption, or simply realised that Kazakhs preferred their local varieties of fast food. Nor has Burger King set up in Kazakhstan, although it was expected in 2009, causing local rip-off King Burger to made a hasty name-change to "Kind Burger".

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