An appetite for growth

The quick service restaurant (QSR) industry is attempting to deal with an anomaly plaguing this sector with consumers still hesitant to spend at outlets, and the current focus of senior managers at leading chains is on promotional offers and new product launches. In addition, QSR chains are also expanding their presence to tier-II and smaller towns, which are currently witnessing a consumer boom.

This development comes at a time when same-store sales growth at QSRs, which had been robust, is expected to slow to 8-10 per cent over the next few years, pointed out a recent research report by CRISIL. And, that’s largely because a sluggish economy and multiple store opening in a catchment area will hinder same-store sales growth. In contrast, the QSR industry is expected to grow at 27 per cent over the next few years and largely driven by expanding the network on a pan India basis, highlighted this report.

To keep the cash registers ringing at existing outlets, leading QSR chains
are aggressively wooing consumers. For instance, schemes like buy-one-get-
one-free are not just limited
to pizza chains, but is also being leveraged by KFC and Cafe Coffee Day, and offered
on Wednesday.

K Ramakrishnan, President - Marketing, Cafe Coffee Day, said, “Such activities help to significantly boost sales during mid-week.” The nearest competitor, Costa Coffee has recently launched its summer range of coffee coolers via its popular summer-themed brand – Costa Ice, which offers Costa Coolers in four variants.“We need to innovate and ensure consumers keep coming back,” said Vikram Varma, Head of Marketing, Costa Coffee India. 

Baskin Robbins, too, is  aggressively trying to stay
ahead of its peers and recently offered a free scoop, as part of a sundae or separately. This global chain operates in the country via its master franchisee, Graviss Foods. Sanjay Coutinho, CEO, Graviss Foods, said, “We needed to ‘engage’ better with our
target audience.”

New destinations for fast food

QSR chains including KFC and Cafe Coffee Day are also expanding their presence in tier-II and smaller towns, as they have recognised the growth potential in this segment. For instance, annual expenditure at QSRs amongst families in smaller towns grew nearly 108 per cent to
Rs 5,200 over the past two years vis-à-vis 35 per cent rise in metros during this period.

And, once again increased employment opportunities as
well as convenience are driving the growth of chains in tier-II towns. Clearly, the focus of QSR industry is on keeping cash registers abuzz.