On Friday, KFC and Pizza Hut operator Sapphire Foods India (SAPI.NS) reported a 57% drop in fourth-quarter profitability due to increasing expenses and competition at a time when consumers cut back on discretionary spending.
The U.S.-based Yum Brands (YUM.N) franchisee reported a 122.8 million Indian rupee ($1.50 million) profit before tax in the quarter that ended March 31.
In the last several quarters, rising prices of staples have left consumers in the world’s most populated country with little money for apparel and dining out.
Sapphire Foods’ Pizza Hut restaurants’ fourth-quarter same-store sales fell 4%.
As in other countries, Domino’s Pizza (DPZ.N), managed by Jubilant FoodWorks (JUBI.NS), has been competing with the pizza company in India.
For the April-June quarter, Sapphire is marketing ten new Pizza Hut pizzas.
Sapphire’s KFC business grew 2% in the last few months thanks to new menu items, including popcorn nachos, a greater advertising spend, and celebrity partnerships.
Sapphire, which opened other eateries, saw quarterly income from operations rise nearly 13% to 5.6 billion rupees.
Despite the rise, total expenses rose 17%.
Westlife Foodworld (WEST.NS), which operates McDonald’s (MCD.N) fast-food restaurants in West and South India, announced a lower-than-expected fourth-quarter profit owing to inflation earlier this week.
Sapphire, which owns restaurants in Sri Lanka and the Maldives, fell slightly, bringing its year-to-date losses to about 4%.
Comment Template