Food and Beverage Mar, 30 2016

QSRs struggling hard to win back in India

There was a time when people only look at Mc Donalds and Pizza Hut for burgers and pizzas. But now the scenario has changed, the fast food chains even after serving Indian food, the ratio has declined. Read on to know more.

By Joyshree Saha
QSRs struggling hard to win back in India

American fast-food franchises opened their doors to the 1.2 billion-person market eagerly awaiting their arrival in India, just as consumers in the U.S. and Europe had soured on the stuff. The McDonald’s, the Pizza Huts—they were all so new, different and American.

Indians weren’t ordering Maharaja Macs from McDonald’s with the same gusto. More U.S. chains poured into the subcontinent, with Wendy’s, Starbucks, Burger King flooding the market alongside local fast-food options. With the subset of the Indian population that can afford the luxury of a restaurant meal already limited, McDonald’s and Pizza Hut are now working overtime to figure out how to win back once wide-eyed customers.

According to The Wall Street Journal, McDonald’s came out with a revamped version of the Maharaja Mac, replacing the original, best-selling two-patty chicken burger with thicker patties and a new habanero sauce. The Golden Arches also unveiled a vegetarian version of the Big Mac—two corn and cheese patties—to appeal to a wider swath of the Indian customer base, along with an ice-cream-and-chili-flake dessert.

Similarly, Pizza Hut did a little menu tweaking of its own to re-ignite its fire, putting a mini–chickpea pizza up for offer, reported Journal. And, for those Indians seeking the authentic Italian experience, the franchise may begin allowing customers inside its kitchens to make their own pizzas.

At the same time, Subway, has recently introduced SubWraps for its customers in India. Also, the brand recently opened a new Subway restaurant located in Dindayal City Mall, a popular landmark in Gwalior city. Completely owned by local franchisees who are entrepreneurs that love the opportunity to work hands-on, training to franchisees is provided through Subway’s world headquarters in Milford, Connecticut, USA; five regional offices and various country offices across the globe. The franchisees are supported by dedicated locally-based Development Agents, and their staff.

”Subway’s franchise business model coupled with its globally appealing menu offerings makes it an attractive investment opportunity for aspiring entrepreneurs. This is the ninth restaurant in Madhya Pradesh and we hope to expand this number by exploring opportunities in other centres/cities within the state,” shared Abhishek Bahety, Development Agent, Subway, Madhya Pradesh.

According to reports, McDonald’s tumbled to 26 per cent in 2014 from 38 per cent in 2009, and Pizza Hunt’s parent company, Yum Brands, has sunk to 18 per cent from 31 per cent. McDonald's last week fourth-quarter same-store sales in China rose four per cent, a second straight quarter of growth. Yum said its same-store sales, reflecting underlying growth, also returned to growth in the second half but more slowly, leaving annual China sales falling for the first time.

But, there is no answer why McDonald's is faring better than other brands. However, Yum CEO Greg Creed figured out why sales at Pizza Hut have gone cold as the chain needs to be more like the car-hailing service Uber. Thus, the food chains are hoping the changes will bring new customers in the door, same as the store sales growth in India, which has fallen in the last two years for both the brands.

Related: Binge on food business

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