The quick service restaurant (QSR) segment has been facing a slowdown in consumer spending. It has managed growth in revenue by increasing penetration and store count but per-store sales are hit.
To recover sales and increase the footfall in their outlets, Devyani International and Lite Bite Foods are choosing new store locations with some care. Lite Bite - it owns 12 restaurant brands, including Subway, Punjab Grill and Street Foods of India - is focusing on airports, railway and metro rail stations, apart from delivery on board while Devyani, franchise owner of KFC, Pizza Hut and Costa Coffee, prefers office complexes and hospitals. Such locations ensure a certain number of restaurant visitors across seasons.
Costa Coffee now has half of its 100 outlets in office complexes, airports and hospitals. The coffee chain is in a phase of consolidation - closing of unprofitable stores and opening new ones in locations which ensure a higher footfall. The process has helped them turn profitable this year.
Lite Bite has 35 outlets at the Mumbai airport and earns 60% of its revenue from the travel gateway. Of its 100 outlets, 13 are at Delhi airport, six in various international airports (including Washington DC, Singapore, Bangkok and Abu Dhabi) and nine in Mumbai metro rail stations. This fiscal year the company grew by 10%. However, same-store growth remained subdued in standalone stores. They are currently planning to open 16 new outlets in Mumbai airport, which will increase sales by Rs 40-50 crore next year. Lite Bite's sales in 2014-15 were Rs 160 crore.