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Competition is heating up in Cambodia’s growing fast-food sector, with international chains Pizza Hut and Burger King set to go head-to-head in the Kingdom.

But the industry’s rapid expansion is a cause for concern among street vendors and local restaurateurs, some of whom are feeling the pinch from increasing competition and changing customer expectations.

The market for fast food in Phnom Penh is estimated to be worth US$40 million a year, which accounts for 5.3 percent of the capital’s $744 million annual food expenditure, according to Tep Virak, general manager of Express Food Group – which runs Pizza Company and Swensen’s franchises in the Kingdom.

But while fast food still has a relatively small market share, competition within the sector has increased significantly in the past five years. Tep Virak said business was becoming “tougher and tougher every day”.

That trend looks set to continue as Cambodia’s fast-food heavyweights expand their existing franchises and introduce new international brands.

Express Food Group is now negotiating for the rights to run a franchise of American fast-food chain Burger King, while KFC’s investors are planning to open the Kingdom’s first Pizza Hut early next year.

“Competition is going to be tougher when more international brands come, but I believe that we can still be competitive,” Tep Virak said.

“We are well-prepared. We’ve built a good foundation to step on.”

Express Food Group, a subsidiary of Thai company RMA Group, plans to build two new outlets of Swensen’s and Pizza Company next year, bringing the total number of each store to six and eight respectively. It also plans to expand its newest brand, Korean franchise BBQ Chicken, by three shops.

Tep Virak said the Burger King deal was moving forward, but the launch was still some time away.

“We are still discussing, negotiating. We are progressing, but I cannot give any timeline,” he said.

He said the company was performing well and would seek to be listed on Cambodia’s planned stock exchange, but he declined to give revenue details.

Meanwhile, business at KFC is picking up following the economic crisis.

Benjamin Jerome, general manager of KFC franchisee Kampuchea Food Corporation, said revenue growth was expected to reach 5 percent per annum.

The company, a joint venture between Kith Meng’s Royal Group, Malaysian company QSR and Hong Kong firm Rightlink, has pumped $10 million into its KFC franchises since the first outlet opened in 2008. It plans to build three new stores next year, bringing the total to 13.

The company is also putting $3 million towards its Pizza Hut franchise, with the first outlet due to open on Phnom Penh’s Monivong Boulevard early next year. Ten more Pizza Hut stores are planned over the next five years.

Jerome said the sector had recovered well from the recession and was “still vibrant as before”.

“The recovery of the world economic situation, which impacted the domestic consumer spending, did help the recovery of the industry,” he said.

He said the fast-food sector was “a challenging environment”, but he welcomed further competition.

“More competition will improve the industry’s standards, which benefits consumer choice and satisfaction.”

But not everyone stands to benefit from greater consumer choice.

Street vendor Chan Thouen said the growing popularity of fast food had contributed to a decline in sales at the barbecue chicken stall that she and her mother have operated on Phnom Penh’s Sihanouk Boulevard for 10 years.

“Prior to five years ago, I sold 80 to 90 chickens per day. I sold very well,” she said. “Business has gone down. Right now I sell only 40 chickens per day.”...read the full story in tomorrow’s Phnom Penh Post or see the updated story online from 3PM UTC/GMT +7 hours.


http://www.phnompenhpost.com/index.php/2010121945493/Business/fast-food-sector-takes-off.html
 

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Home Energy Reactor
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I prefer ''Pizza Hut'' over ''Pizza Company'' :)
Me too, but a lot of people from the west regards Pizza Hut's pizza not real Pizza.
 

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Home Energy Reactor
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Really ? Because it's American, not Italian ? If so, I love American Pizza !:)
Yes, you are right, but Pizza by definition is Italian. Which is why lots of people say it is not real pizza.

Pizza Hut is American origin, but I don't know if the pizza they sold meant to represent America.

But me too, I like Pizza Hut variety over the traditional Italian type.
 

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Home Energy Reactor
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I'm looking forward to Mcdonald's than Pizza hut or BK!
McDonald and Pizza Hut are not really in direct competition, but it will need to compete with existing successful burger franchise.

In Australia, I actually like KFC and Burger Kings' burger better then McDonald's, and I love KFC's nuggets, however, the nuggets in KFC Cambodia is different and isn't as good, it may looks cheaper, but the burger here are so small.

Also, why is it so boring in Cambodia that all business only have Tomato and Spicy sauces, I want BBQ sauce, sweet and sour, satay sauce, etc.
 

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Naked dream :)
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loterria ?/? whats that
i dunno....i just see it in when i eat KFC in my hometown plaza tower, opposite KFC is a small restaurant name "Lotteria"...:lol:
 
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