Pizza Hut, KFC report strong sales growth

Fast food major Yum! Brands, which operates Pizza Hut, KFC and Taco Bell brands in India, saw a sharp sales momentum in the three months ended June 2017, reporting a system sales growth of 9 per cent for KFC and 8 per cent for Pizza Hut.

System sales growth is industry parlance for same-store sales growth (SSG), a key metric for food service operators.

Yum is the third major food service operator in India to report positive SSG for the June quarter.

Earlier this week, Westlife Development, which runs McDonald’s restaurants in west and south India, reported an SSG of 8.7 per cent for the June quarter, higher than the 3.4 per cent it reported a year ago.

Jubilant FoodWorks, which runs Domino's Pizza and Dunkin Donuts restaurants in India, saw SSG come in at 6.5 per cent for the quarter, compared to a decline of 3.2 per cent reported a year ago.

For Yum, the June quarter will be the fourth straight quarter of positive SSG for its restaurants in India, putting firmly behind the nearly three years of sales slump the company witnessed earlier.

Rahul Shinde, managing director, KFC India, said the sales growth in the June quarter was a result of the company’s focus on core products (such as KFC buckets, burgers, hot wings etc), innovations and value offerings.

Specifically, Yum’s turnaround in India began in the September 2016 quarter, when it reported an SSG of 6 per cent for Pizza Hut and 13 per cent for KFC.

The company bettered its performance for the quarter ended December 31, 2016, characterised by the high-value note ban imposed by the government, when it reported an SSG of 9 per cent for Pizza Hut and 16 per cent for KFC.

In the March quarter, sales growth tapered to levels of about 6 per cent for Pizza Hut and 2 per cent for KFC, with the June quarter showing signs of recovery again.