Outlook Business
QSR KFC Pizza Hut McDonald Food Market Image Credit: Outlook Business
QSR KFC Pizza Hut McDonald Food Market Image Credit: Outlook Business

How QSRs Are Dealing With The Slowdown?

QSR Chains Are Going Back to the Drawing Board to Regenerate Growth From a Stagnant Market. Will They Succeed?

Himanshu Kakkar

It has been over two decades since McDonald’s, Pizza Hut and Domino’s entered the Indian market and since then international QSRs have played a huge role in building the food services market. However, the last couple of years have been quite a challenge for them. New stores failing to yield the desired numbers and dwindling footfalls in older stores, has been leading to unimpressive single-digit or in some cases, negative same store growth (SSG) numbers. As a result, their profitability has taken a hit. Jubilant Foodworks saw its profit after tax decline by 34% from ₹91.7 crore in nine months of FY16 to ₹60.5 crore in nine months of FY17. As they continue to chase growth, all players have taken a hard look at their overall strategy. Be it store expansion, location, operating costs, or even store ownership. And instead of pursuing mindless growth, the focus is back on reining in costs and expanding judiciously. But can the international food chains sustain their first-mover advantage and reinvent themselves, yet again to cater to the changing Indian market?

COMEBACK STRATEGY

It has been tough for the QSRs in the past couple of years and the numbers show it (See: Hunger Pangs). Ajay Kaul, outgoing CEO, Jubilant Foodworks believes that it is not just QSRs that are struggling with growth. “For the past 2-3 years, it’s not just the food service category, these are also the worst years for the FMCG i


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