- KFC had to close 70 outlets due to a shortage of bone-in chicken parts, and Famous Brands and Nando’s are also battling supply chain issues.
- The load reduction is hindering production and affecting logistics.
- Big retailers say their chicken supplies are not affected.
- For more financial news, go toNews24 Business Cover.
As KFC struggles with chicken shortages that prompted it to temporarily close some of its outlets, major fast food chains Famous Brands and Nando’s say they are also battling supply chain crises, courtesy of the incessant load loss.
Famous Brands, which owns Wimpy and Steers, confirmed on Thursday that it had “experienced procurement shortages caused by sustained load loss” but that the “disruption is being actively managed.”
“This includes short deliveries of chicken from chicken farmers,” said the group, which also owns Mugg & Bean and Debonairs, among other brands. He said that none of his outlets had been closed due to the problems.
Geoff Whyte, Nando’s managing director of Africa, Middle East and Asia, said in an interview that the cargo shedding was affecting chicken production along with deliveries to restaurants.
“From our perspective, it has put us under enormous pressure, but we have managed to keep all of our restaurants (300 in South Africa) fully stocked and open.”
Power outages are particularly problematic when load shedding stages escalate to levels four, five and six, Whyte said.
He said that from a production standpoint, growers’ processing plants require “massive amounts of power,” making it impractical for them to have backup generation to keep the facility running during the outage. of load.
“The problem is that these are huge production facilities and they require so much power that it’s not really practical to leave enough generation to allow them to run when the power goes out. They’ve been working around load shedding. As long as the load shedding is two hours during a normal business day, then they can cope. But if you have eight hours a day of load off every day, then (the production process) everything starts to fall apart.”
On top of all this, traffic congestion caused by stoplights is also affecting logistics companies that deliver to restaurants, and Whyte says suppliers are forced to make fewer deliveries because products take much longer to transport.
“If you have a very heavy load shed that is continuous, makes it impossible to operate effectively and you have shortages, and then you have the logistical challenges on the back of that.”
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This week, KFC temporarily closed 70 of its stores as its chicken suppliers struggled with constant power outages.
The fast food group was struggling with a supply shortage of “chicken on the bone” with outlets in North Gauteng (Pretoria) and KwaZulu-Natal mainly affected.
The group, which has 1,000 outlets in the country, said some of its suppliers experienced immense operational disruption due to “constant and intense load disconnection throughout 2022.”
On Thursday, KFC South Africa said it was “working hard” to ensure that no more stores are affected and that “those that are affected are back in operation as soon as possible.”
“More than 900 KFC restaurants still serve many of our fan-favorite foods and we expect full operations to return in the coming weeks.”
There have been over 200 days of load disconnection this year in SA, making 2022 the worst year on record when it comes to power outages.
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Contacted for comment, Chicken Licken said through its attorney Ron Wheeldon that none of its outlets had been affected by the shortage.
The South African Poultry Association did not immediately respond to requests for comment.
Unexperienced shortage in grocery segment
The chicken supply chain woes, however, do not appear to have spilled over into the grocery sector, as two of the largest retailers in that segment say they have not experienced shortages.
Shoprite said it was not experiencing a shortage of chicken at any of its supermarkets, adding that its suppliers had not indicated that there were insufficient stock levels.
“Store stock levels will fluctuate from time to time depending on the availability of our suppliers, but if a customer is having any difficulty finding a specific product they are looking for, they can speak directly with store management to help them obtain the product. product or suggesting an alternative in stock,” he said.
Shoprite added that it had also made substantial investments over the years to equip all of its supermarkets with generators to enable uninterrupted operations, including keeping refrigerators and freezers running to protect perishables during intermittent power outages.
“It has become a standard specification for new stores.”
Pick n Pay said it was “fully stocked for customers” and was “experiencing no shortages in our supply chain.”
“We will closely monitor the supply,” he said.
