After a slow year, the sale of fast foods in India is back on track to be better than ever before. The sales of quick service restaurants (QSRs) are reportedly breaking the records this year.
Whereas Westlife Development, which is the master franchise of a significant junk food company in India, reported a 22 percent year on year growth with the highest ever annual earning of Rs 1,100 crore, Jubilant Foodworks, which operates a prominent pizza chain in India, reported a same-store sales growth (SSG) of 26.5% in the final quarter of the Financial Year 2018, a 19 percent increase from the last year’s numbers and the highest of the last six years.
Westlife Development has 277 food outlets in multiple cities in India. The company also reported SSG of around 25% in the fourth quarter of FY18, which is the highest in the past five years.
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Jubilant Foodworks also witnessed a surge in quarterly profit by 10 times, from Rs 6.7 crore to Rs 68 crore in just one year.
A Kentucky food company, which is another popular QSR operating 300 outlets in India, also reported a sales growth of around 17 percent in this quarter, as compared to 2 percent growth in the same period last year.
All three companies accept that their sales had dropped a bit after demonetisation along with the addition of GST. The conditions were so severe by the last year that many major brands had to close their outlets in the number of hundreds. The profit report of pizza company revealed that the SSG had dropped in negative during the time.
A 5 percent tax, which is obviously low than the standard, on restaurant foods can be considered as a factor contributing to this growth. However, the major driver of growth has been the fast recovery of the economy after demonetisation and GST and a visible growth in disposable income.
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Following the growth reports, most of the major QSRs in India are confident of more profits. “Spending will continue to grow in the near future,” says Westlife Development’s vice-chairman Amit Jatia. He further added that the growth of the industry reflects that the consumer is optimistic and hopeful.
While QSRs have started witnessing growth in profits in India, some restaurants are still trying to recover from the after-effects of GST.
