Con­sumers Don’t Find Piz­zas & Burg­ers that Yum

Yum Brands re­ports 6% year-on-year fall in sales of Pizza Hut in the Jan-March quar­ter; KFC fares bet­ter with just 1% de­cline

The Economic Times - - Brands: Creating Desire - Our Bureau

New Delhi: Sales of Pizza Hut chain in In­dia de­clined 6% yearon-year in the quar­ter ended March while that of KFC dropped 1% as western style foods con­tinue to wit­ness slump in sales with consumer ap­petites for piz­zas, burg­ers and wraps fall­ing short of com­pa­nies’ ex­pec­ta­tions. Yum Brands, which op­er­ates quick ser­vice restau­rant brands Pizza Hut, KFC and Taco Bell, has changed dis­clo­sure lev­els of earn­ings start­ing the Jan­uaryMarch quar­ter. The com­pany has stopped shar­ing same store sales of the In­dia busi­ness as a stand­alone en­tity as it has in­te­grated th­ese into global KFC, Pizza Hut and Taco Bell Di­vi­sions.

“Yum has likely clocked 10 con­sec­u­tive quar­ters of neg­a­tive same store sales growth, re­flect­ing chal­lenges for all QSR play­ers,” fi­nan­cial ser­vices firm Edel­weiss wrote in a re­port re­leased on Thurs­day. Yum Brands op­er­ates close to 800 Pizza Hut, KFC and Taco Bell stores in the country. Heavy pro­mo­tions and price-offs haven’t re­sulted in higher sales, with lead­ing play­ers in­clud­ing Yum, McDon­ald’s and Ju­bi­lant Food­Works re­port­ing muted low sin­gle digit or neg­a­tive growth for at least the past eight quar­ters. In Jan­uary this year, Yum In­dia split oper­a­tions into three in­de­pen­dent ver­ti­cals for its restau­rant brands, hop­ing to step up sales and make oper­a­tions nim­bler in a slow­ing consumer mar­ket.

Last year in July, a con­sor­tium of in­vestors led by pri­vate equity firm Samara Cap­i­tal ac­quired Pizza Hut’s south and west In­dia fran­chise op­er­a­tion from the Dod­sal Group.

The deal was es­ti­mated at close to .₹ 200 crore.

Yum’s fran­chisee oper­a­tions are now con­sol­i­dated be­tween Ravi Jaipuria-owned Devyani In­ter­na­tional in the north and east and Samara Cap­i­tal in the south and western re­gion.

Rel­a­tively newer en­trants to the space in­clude Burger King, Wendy’s and Carl’s Jr.

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