Unlikely losers in the 30% Trump tariff increase are SA fast food franchises of popular American brands. According to Nedbank Retail Services, SA fast food franchises from McDonald’s, Burger King and Starbucks will likely come under immense pressure.
While many ingredients are locally sourced, SA fast food franchises of these popular US brands still need to specially import items to maintain brand consistency and quality. As a result, after Trump tariff increases, imports will become more costly and royalties higher.
SA FAST FOOD OUTLETS TO FEEL PINCH
New 30% Trump tariffs come into effect on Thursday 7 August 2025, reports BusinessTech. The impact on key industries like vehicle manufacturing and agriculture has been widely reported upon. However, the wider impact on local consumers – and the likes of SA fast food outlets – is still less apparent.
“US-based franchises operating in South Africa may struggle to keep pricing competitive if they import branded or specialty items. This may force franchise owners to source more locally. And this may compromise brand consistency,” said a spokesperson from Nedbank Retail Services.
FRANCHISOR SLOW DOWN
As a result, SA fast food franchisors may have to scale back expansion plans. Royalties paid in US dollars will only become more expensive in a weaker-Rand environment. “This is bad news for the whole retail sector, but particularly franchising, which relies on strong middle-class spending power to thrive,” explained the bank.
However, the unique situation does present opportunities for local-is-lekker SA fast food chains. The likes of Nando’s, Chicken Licken, Spur, Wimpy and Steers will be there to snap up market share at the expense of US brands. “In our experience, South African businesses are resilient, and many of our clients are already adapting long-term plans to ensure business survival,” the bank concluded.
SHOULD GOVERNMENT TAKE A LEAF OUT OF SA RETAILERS’ BOOK?
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