Grand Parade to close Dunkin', Baskin Robbins in South Africa
JOHANNESBURG, Feb 15 (Reuters) - South Africa's Grand Parade
Investments (GPI) Ltd plans to close its loss-making
Dunkin Donuts and Baskin Robbins franchises in the country after
failing to find a buyer, and will focus on its Burger King
outlets, GPI said on Friday.
GPI signed a franchise agreement with Dunkin' Brands Group
Inc, which owns Dunkin' Donuts and ice cream company
Baskin Robbins, in 2016, betting that South African demand for
snacks and drinks from international chains would hold up,
despite pressures on disposable incomes.
But a recession in 2018, elevated household debt, higher
fuel prices, the introduction of sugar tax and an increase in
value-added tax from 14 percent to 15 percent has squeezed
consumer spending and hit earnings and margins at the chains.
"The decision to exit Dunkin Donuts and Baskin Robbins was
made following sustained losses in these businesses and an
unsuccessful process to dispose of these businesses," GPI said
in a brief statement.
It did not say how many stores would close or how many jobs
might be affected. In its results for the year ended June 30,
2018, GPI said it had 11 Dunkin’ Donuts and five Baskin Robbins
In that period, the Dunkin' Donuts business made a loss
before interest, tax, depreciation and amortization of 24.9
million rand ($1.8 million), while the Baskin Robbins business
made a loss of 18.6 million rand on the same basis.
($1 = 14.0582 rand)
(Reporting by Noor Zainab Hussain in Bengaluru and Nqobile
Dludla in Johannesburg; Editing by Patrick Graham and Mark
First Published: 2019-02-15 10:52:58
Updated 2019-02-15 12:48:33
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