INDIA – Jubilant FoodWorks, operator of Domino’s Pizza and Dunkin’ Donuts in India plans to invest upto US$35.2 million (Rs 250 crore) to set up over 120 stores in both existing and new markets this year across the country.
The company, which had earlier estimated to open 100 stores this year, said it will now be spending Rs 200-250 crore (US$28-$35 million) in the capacity expansion.
According to an ET Retail, Jubilant FoodWorks opened 40 stores in the July-September quarter, the most in almost four years. It however closed six stores and has an overall count of 1,283 restaurant across 276 cities.
Pratik Pota, the company’s chief executive said that the expansion was instrumental to its growth despite the underperforming dine-in business in favor of the booming home delivery business.
“As consumers seek more convenience, they want the option of home delivery and there are many more brands to bring them delivery. It is also a reflection of the current consumer sentiment,” Pota said.
Pota said the company is responding to the changing consumer dynamics where there is a shift away from dining-in; “We recognise the importance of dine-in as a channel for maintaining consumer connect.
“So, even as we work with aggregators to drive market expansion, we will also invest in building our own digital assets and investing in strengthening dine-in,” he added.
Pota said while growth moderated in the smaller towns and markets, reflecting the overall damping of consumer sentiment, same-store sales and like-for-like growth came on the back of the focus on delivery.
“We are looking at initiatives to drive dine-in growth and remain invested in accelerating delivery growth,” Pota said.
Jubilant reported a 3.4% decline in consolidated net profit to Rs 72.98 crore (US$10.28m) for the quarter ended September.
The group’s revenue increased 12.16% to Rs 998.05 crore (US$140.59 millon) while same-store sales growth stood at 4.9%, cycling a high base of 20.5%.
Commenting on the financial performance, Shyam S. Bhartia, Co-Chairman, Jubilant FoodWorks said;
“In the face of a challenging external environment, we are glad to report that our strategy of offering value for money and superior customer experience has resulted in a strong, double digit revenue growth, along with a sequential improvement in margins.”
“We believe that the Indian Food Services industry is structurally attractive and we have the right strategy and levers in place to help us drive profitable growth.”