SÃO PAULO – Brazil’s economy is contracting and consumer spending is weak, but that has not scared off several US-based restaurant chains, including Subway and McDonald’s, from expanding to South America’s largest dining market, according to a Dow Jones Business News report.
Many of the Brazilian middle class, estimated at more than 100 million people, enjoy eating out and like US brands. Recognizing this – and taking advantage of bargain leases and many retreating local operators are pulling back – US chains, which include Hooters, Outback and Domino’s Pizza, see an opportunity.
“The Brazilian economy will improve, and we’ll be in a position to take advantage of that,” said Patrick Murtha, president of Tampa-based Bloomin’ Brands Inc.'s international division, which runs the Outback steakhouse chain and will open a dozen outlets in Brazil this year, the most in any of its foreign markets.
Brazilians have developed a taste for U.S. restaurant chains, in part because they increasingly travel to North America, according to Dow Jones.
The US is the No. 1 foreign destination for Brazilians. Johnny Rockets, owned by the private-equity firm Sun Capital Management, has nine locations in Brazil with three more planned this year.
The number of franchised food chains operating in Brazil has almost doubled since 2009 to a total of 685 at the end of 2014, according to the Brazilian Association of Franchisees.