Food fast majors show double-digit sales growth consistently

Aug 10, 2018

Well good days for the fast food industry are here again as in the last three quarters nearly all food fast major have shown double-digit sales growth consistently. System sales growth, in industry’s dialect, implies topline growth and this is what this top Fast food company showed to be elevated.

Jubilant FoodWorks —  that hold the franchise of Domino’s and Dunkin’ Donuts in India —had a same-store sales growth (SSG), a crucial metric tracked by analysts of stores, which are at least one year old, at 17.8 per cent for the December quarter, jumping to 26.5 per cent for the March quarter and 25.9 per cent for the June quarter.

Westlife Development, that franchises McDonald’s stores in the south and west of India, on the other hand, saw SSG at 20.7 per cent for the December quarter, touching 25.1 per cent for the March quarter and 24.1 per cent for the June quarter. Westlife Development has indicated that it will take its McDonald’s store network to 450-500 by 2022 from 281 now.

Yum! Brands, which owns and operates Pizza Hut and KFC joints in India showed a system sales growth of 22 per cent and 20 per cent, respectively, for the June quarter in India — the highest in two years. This was also aggravated by an 18 per cent system sales growth, respectively, for Pizza Hut and KFC in the December quarter. Figures jumped in the March quarter to 21 per cent (Pizza Hut) and 19 per cent (KFC).

There has been definitely no denying in recovery of consumer sentiment, prompting many to make a way to quick-service restaurants (QSRs), at the heart of it all is a favourable base.

Last year the SSG numbers for two listed players — Jubilant FoodWorks and Westlife Development —come in at 5.5 per cent and 8.4 per cent, respectively which gives a clear indication of this.

According to analysts, Jubilant FoodWorks and Westlife Development are expected to keep their momentum going in terms of new store additions, ensuring that growth levels do not slip in the second half of the year. The management of Jubilant FoodWorks last month said it would ramp up store additions to 75 for the current financial year, up from 24 new stores the company added in the last financial year.

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