QSR chains go upmarket in face-off with gourmet brands

For long, western fast-food chains operating in India have focussed on low prices and localized fare to grow in scale and scope. But now, they are increasingly turning to premium bases and ingredients as competition from high-end gourmet pizza and burger brands shows that there are better profits to be harvested.

- Suneera Tandon

Domino's, Wendy's, Burger King, Papa Johns rejig menus to lift margins, beat rivals.

(MINT)

In September, Jubilant FoodWorks Ltd which runs Domino’s outlets across India launched sourdough pizzas starting at ₹349—this at a chain that offers pizzas at prices as low as ₹49.

The move is also intended to expand clientele by bringing in new, more discerning consumers and upsell premium offerings to the regulars who come for the affordable fare.

Sourdough is naturally fermented dough without the use of yeast and this gives pizzas and breads a crunchy structure and nutty taste. “There is a growing opportunity at premium end of pizzas—more gourmet, wood-fired, sourdough—and I believe the team has done a great job of bringing sourdough pizza into the mix,” Sameer Khetarpal, CEO and MD, said during Jubilant’s September quarter earnings call.

The company has given an Ebitda margin guidance of 200 bps expansion over the next three years on the back of cost efficiencies, mix changes, calibrated price hikes, etc.