Mint Explainer: What's behind the slowdown in fast-food sales?

livemint.com:

Devyani International Ltd, Sapphire Foods, Jubilant Foodworks, and Westlife Foodworld Limited, reported sluggish sales in the September quarter. This was due to a combination of factors, such as an extended period of religious days, which adversely affected the sale of non-vegetarian food, and increasing competition from smaller players. Most restaurant and fast-food chains underperformed in the September quarter.

Westlife Foodworld Limited, owner of Hardcastle Restaurants Pvt. Ltd., the master franchisee of McDonald's in West and South India, reported same-store sales growth of 1% year-on-year in the quarter. This, analysts said, was "well below" the average of the past four quarters – 20% year-on-year – albeit on a high base.

For Devyani International, which operates brands such as KFC, Pizza Hut and Costa Coffee in India, September-quarter sales growth was largely driven by store additions. Same-store sales growth for KFC and Pizza Hut declined 4% and 10% respectively. Jubilant Foodworks Ltd (JFL), which operates Domino's pizza outlets in India, reported a 1.3% dip in same-store sales growth during the quarter.

Same-store sales growth measures the performance of existing stores in the company's ecosystem and excludes new stores added during the period under review. Companies and analysts attributed it to a combination of factors. Firstly, local competition is gaining traction as small pizza and burger chains mushroom across India.

High inflation has also been weighing on household budgets. The quarter also saw high inflation in vegetable prices. Companies meanwhile hiked prices to counter the high food inflation.