Food & Drink Americana CEO says boycott ‘worst is behind us’ By Neil Halligan November 5, 2024, 4:36 PM Alamy via Reuters A KFC store in Cairo. Americana brands across the Mena region have been suffering from a customer boycott Boycott cut Americana profit 54% Performance now ‘stable’ Fewer stores opening Americana Restaurants, the Middle East franchise owner for KFC, Pizza Hut, Krispy Kreme and Hardee’s, believes the company has weathered the worst of the boycott issues it faced this year, which led to a significant slump in its profit. CEO Amarpal Sandhu said it is not predicting a “hockey stick recovery” – a sudden and sharp upswing – but does not expect results to deteriorate further, he told an investors’ call on Monday. The company has almost 2,500 fast-food outlets across the Middle East, North Africa and Kazakhstan. Americana announced a 54 percent drop in profit in the third quarter to $37.4 million, as the boycott of US brands over perceived support for Israel continues to impact operations in the region. “We continue to navigate the challenges posed by the geopolitical situation and stagnation in consumer demand in some of our markets,” Sandhu said on the call. He said revenues performed much better in the most recent quarter, saying “top line performance versus Q2 2024 has been stable, with a marginal decline of circa 1 percent in sales”. The company is “strategically focusing on markets which are less impacted by the geopolitical conflict, such as the UAE, Saudi Arabia and Morocco,” he said. Americana has dual listed on the Abu Dhabi Securities Exchange and Saudi Exchange since 2022. It has added 113 new restaurants so far this year, with 53 under construction. It had planned to open 225 restaurants this year which was revised down in the summer to between 175 and 185 and has now been further amended to between 150 and 160. Sandhu said the company will “maintain a cautious approach on new store additions” and focus on business recovery. “The ongoing conflict in the Middle East has presented challenges for our business, [but] we believe the worst is behind us,” Sandhu said. “Our confidence in our brands and core markets remains strong.” The company is drawing up a five-year plan that will look at adding other brands and will consider new markets, possibly in former Soviet countries that would add to its business in Kazakhstan. Americana opens more stores despite profit slump Shareholder disputes worsen Saudi fast-food chain Herfy’s woes Rise in retail M&A predicted as Gulf stores struggle Americana is also the regional franchise operator for TGI Friday’s, which on Saturday filed for bankruptcy protection in the US. The Dallas-based company, owner and operator of 39 restaurants in the US, said it took the action to “explore strategic alternatives in order to ensure the long-term viability” of the casual dining brand. In its statement on Saturday, TGI said the brand has 56 franchisees in 41 countries, which are “independently owned and therefore not included in TGI Fridays Inc’s Chapter 11 process”. Americana has 44 TGI Friday’s restaurants in six markets in the region. AGBI has contacted Americana for comment.
