As per an article in Economic Times same-store sales at more than 1,600 QSR outlets dropped in the October-December quarter from the year earlier, undermining the belief that consumers look to cheap chain meals for value in an economic slowdown.
Same-store sales at Yum Restaurants India, which operates more than 600 KFC and Pizza Hut stores in the country, declined 4% in the October-December quarter from the year earlier.
Hardcastle Restaurants, the McDonald's franchise partner in the west and south has seen declining same-store sales in the current fiscal. Across 174 restaurants, sales dropped 5.5% in the September quarter from the year earlier. In the north and east, sales at McDonald's outlets dropped 8% in the December quarter.
Jubilant FoodWorks saw same-store sales drop 2.6% in the December quarter, compared with 16.1% growth in the year ago. Jubilant operates 679 Domino's and Dunkin' Donuts stores across India.
What is disturbing quick-service restaurant (QSR) chains is that this has happened despite their determination to keep prices low. The slump comes as fast-food chains seek to overcome the criticism that the dishes they serve are unhealthy, given the amount of sugar, salt and chemical additives contained in them.
India has been trying to revive its growth, which slumped to a decade's low of 4.5% in the 3rd quarter of 2013 -14, but it isn't clear yet whether the economy has bottomed out. In the meantime almost all chains are in expansion mode, increasing the number of stores they have in existing markets and opening up in new towns and cities, in an effort to win new customers.