Pizza Hut Enters Ethiopia in Latest Sub-Saharan Africa Expansion

Pizza Hut Enters Ethiopia in Latest Sub-Saharan Africa Expansion

  • Three outlets due to open in capital by end of this year
  • Lack of competition, cheap power, labor seen as bonuses

(Bloomberg) Pizza Hut is set to open three outlets in Ethiopia this year, becoming one of the first international restaurant chains to enter Africa’s second-most populous country.

The shops are scheduled to begin serving in the capital, Addis Ababa, by November, franchisee Aschalew Belay said in an interview Monday. Aschalew’s company, Belayab Foods and Franchise, will run the local outlets of the Yum! Brands Inc. pizzeria and will have invested $5.5 million in the operations by next year, according to his partner, Michael Ghebru.

Ethiopia is an attractive destination because of its cheap labor and electricity, said Michael, who will run the franchise and initially hold a 15 percent stake. There are “no major” food franchises in Addis Ababa, making competition “non-existent,” he said.

Ethiopian openings are part of a wider expansion under which Pizza Hut plans to boost its number of sub-Saharan Africa stores to 100 by the end of the year from about 70, according to the company’s incoming general manager for Africa, Ewan Davenport. About half of Pizza Hut’s business on the continent is in South Africa, where it opened in 2015, with outlets in Angola and at Camp Lemonnier, a U.S. military base in Djibouti, the top performers elsewhere, he said in an interview, without giving figures.

Ghana, which has three Pizza Huts, is “absolutely firing,” with the partner looking to expand to neighboring countries such as Togo, Davenport said.