Inflation, Economic Woes Eat into Fast-food Majors’ Sales

McDonald's, Domino's & Yum Restaurants post slower same-store sales growth in April-June period Three of the country's biggest quick service restaurant chains — McDonald's, Domino's and Yum Restaurants that operates Pizza Hut and KFC — have reported slower growth in same-store sales during April-June than earlier quarters, signalling that inflation and weak economic sentiments have begun to impact the eating-out segment. The three chains together operate over 1,000 stores in the country. Jubilant FoodWorks, which operates the Domino's Pizza chain, on Wednesday reported same store sales growth of 22.3% for April-June, down from 36.7% in the year-ago quarter. "Consumers are getting more discreet as far as spends in the QSR (quick service restaurant) format are concerned, but on a standalone basis and in the current economic environment, our numbers are very robust," Domino's CEO Ajay Kaul said.  Kaul said Domino's has introduced entrylevel products at . 25 for its dine-in restaurants. "We don't feel the need to drop prices, but we are looking at multiple ways to increase consumer offtake," he said. Jubilant's standalone net profit rose 39.6% year-on-year to . 32.3 crore for the quarter. The company posted a net profit of . 23.2 crore.  Last week, Yum Restaurants India, which operates Pizza Hut and KFC restaurants in India, reported same-store sales at 7% in the April-June quarter, compared to 8% in the January-March quarter this year. And burger-and-fries chain McDonald's north and east restaurants are dropping prices by anywhere between 6% and 15% for entry-level products to spur consumption, starting next month, after same-store sales growth dropped to high single digits in the April-June quarter compared to double-digit growth last year. "There is pressure on consumption and people are beginning to hold back spending," McDonald's India (North & East) MD and JV partner Vikram Bakshi told ET. "The objective of our price rationalisation is to give them more reasons to come to our stores," he added.  Smaller restaurant chain operators such as Lite Bite Foods and Global Franchise Architects too are facing slowing growth. "High inflation is hitting the low-cost sector," said Amit Burman, chairman of Lite Bite Food. Global Franchise Architects said the pizza chain's same-store sales grew 15% in the second quarter and 18% in the first quarter.  ratna.bhushan@timesgroup.com