Burger King faces exit from Argentina with Alsea’s divestment amid local market challenges

The Mexican group Alsea has put the Burger King operations in Argentina up for sale. The decision is part of a regional divestment plan that also includes Chile and Mexico. The company has managed 116 stores in the South American country since 2006.

The chain arrived in the Argentine market in 1989 with the opening of its first unit in the Belgrano neighborhood, Buenos Aires. Currently, the stores are distributed across provinces such as Buenos Aires, Córdoba, and Mendoza.

• Alsea prioritizes the growth of Starbucks, with 133 cafes in Argentina.
• BBVA bank is leading the search for potential buyers.
• The strategy follows the sale of operations in Spain in 2024 to the Cinven fund.

Alsea’s divestment strategy

Alsea aims to streamline its brand portfolio to boost profitability. The process involves the three countries where it holds the Burger King license. Globally, the chain has over 17,000 units across more than 100 countries.

In December 2024, the company completed the sale of 54 stores in Spain. The move reflects adjustments in markets with below-expected performance. Alsea maintains operations of other brands in the region.

Historical presence in Argentina

Burger King began operations in Argentina 36 years ago. The expansion reached 100 units in 2017. The stores operate in 11 provinces, including Santa Fe and Tucumán.

The chain faced impacts from the Covid-19 pandemic with a drop in sales. Iconic units, such as the one at the Corrientes and Florida corner, closed in 2019. The fast-food sector is experiencing general stagnation in local consumption.

Competition in the fast-food sector

McDonald’s leads the hamburger market in Argentina. The local chain Mostaza holds second place with affordable prices and expansion in shopping malls. Burger King competes for third place.

Artisanal burger joints have gained ground in recent years. Fried chicken chains have also grown as competitors. Consultants highlight the commoditization of the category with a focus on delivery and promotions.

Innovation in broader menus pressures traditional operators. Mass consumption faces persistent economic challenges.

Candidates for acquiring the operations

Local groups like DGSA, owner of Kentucky and Sbarro, show interest. The Inverlat fund, linked to Havanna, is considering entering the segment. The Ecuadorian group Int Food, operator of KFC, emerges as an international option.

• DGSA operates in fast food with various brands.
• Inverlat previously managed Wendy’s and KFC.
• Int Food expanded in the region since 2018.

The sale process continues without a set timeline. Alsea avoids commenting on market speculations.

Continuity of other Alsea brands

The company continues with Starbucks in Argentina. The coffee chain has 133 active units. The focus shifts to expanding businesses with higher returns.

Alsea operates in 12 countries with 4,785 locations in total. Brands like Domino’s and Chili’s are part of its diverse portfolio. The strategy aims for operational efficiency across Latin America.