By Shivani Tanna
(Reuters) -India’s Jubilant FoodWorks reported increased fourth-quarter profit and sales growth on Wednesday, as the Domino’s Pizza franchisee benefited from strong online sales due to discounts and free deliveries, as well as new store additions.
India’s fast-food sector is cooling as budget-conscious customers are cutting back on spending amid high living costs and slow wage growth, with franchisees relying on discounts to stay competitive in a crowded market.
Jubilant, which has not hiked prices on average in at least two years, will be very “scientific” and “rigorous” in adjusting them, CEO Sameer Khetarpal said in a conference call.
The company had corrected prices for its “Volcano Pizza”, but is still heavily focused on value, he added.
Analysts believe Jubilant’s investments in 20-minute in-house delivery and app orders are reducing its reliance on third-party platforms such as Zomato and Swiggy, which rivals are heavily dependent on.
The company reported a profit before tax and exceptional items of 695.20 million rupees ($8.15 million) for the quarter, up from 548.61 million rupees a year earlier.
Domino’s India posted a 12% sales increase at stores open for at least a year, up from 0.1% last year, surpassing Sapphire Foods, even as Pizza Hut offered a “super sale” with a drink and two sides.
It benefited from discounts on third-party platforms and waived delivery fees on app orders, with delivery revenue rising by 27.1%, while dine-in revenue remained flat.
The company opened 52 new Domino’s outlets in India during the quarter, bringing the total to 2,179, boosting its overall revenue by 33.6% to 21.03 billion rupees.
Expenses surged about 32% year-on-year due to higher prices of cheese, oil and coffee, and personnel costs, dragging the core profit margin in the quarter down 131 basis points to 18.5% from last year.
($1 = 85.2590 Indian rupees)
(Reporting by Shivani Tanna in Bengaluru; Editing by Mrigank Dhaniwala and Vijay Kishore)
