Expansions are on hold & value for money products are the in thing
Bon appétit in India? A year back, the answer to this question for global QSR brands would definitely be a yes. Thanks to the gastronomic Indian market, this sector has shown a whopping 35% growth till August 2008. From the beginning of 2007 till the first half of 2008, the sector has seen a mind boggling investment of Rs.1.6 billion (according to figures from Federation of Hotel & Restaurant Association of India, FHRAI). While growth rate of the pizza market in US is just 5%, India has shown a strong 20% growth.
However, all that seems to be a history now, as the prevailing economic turmoil has browbeaten the feasting dreams of the Rs.25 billion Indian QSR industry. The economic meltdown has impacted them in two ways; on one hand, there’s a stymie on real-estate development and on the other, there’s rising real estate cost. “Indeed, rising real estate cost is a deep concern,” avers Ajay Kaul, CEO, Domino’s Pizza India Ltd. No wonder then that Domino’s has slashed its growth plans from opening 65 stores in 2009 to 45.
Bon appétit in India? A year back, the answer to this question for global QSR brands would definitely be a yes. Thanks to the gastronomic Indian market, this sector has shown a whopping 35% growth till August 2008. From the beginning of 2007 till the first half of 2008, the sector has seen a mind boggling investment of Rs.1.6 billion (according to figures from Federation of Hotel & Restaurant Association of India, FHRAI). While growth rate of the pizza market in US is just 5%, India has shown a strong 20% growth.
However, all that seems to be a history now, as the prevailing economic turmoil has browbeaten the feasting dreams of the Rs.25 billion Indian QSR industry. The economic meltdown has impacted them in two ways; on one hand, there’s a stymie on real-estate development and on the other, there’s rising real estate cost. “Indeed, rising real estate cost is a deep concern,” avers Ajay Kaul, CEO, Domino’s Pizza India Ltd. No wonder then that Domino’s has slashed its growth plans from opening 65 stores in 2009 to 45.
Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
and Arindam Chaudhuri (Renowned Management Guru and Economist).
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