Jubilant FoodWorks, the country's largest quick service chain and operator of Domino's Pizza, said it has not increased prices over the past 15 quarters and has instead relied on cost-cutting to retain market share and increase sales amid intensifying competition and subdued demand.
"We have taken several initiatives to reduce costs. We run a programme where we look at all the cost-cutting items, including discounts, rider cost, manpower productivity, support function and rental renegotiations, but we will not increase prices for consumers," Sameer Khetarpal, managing director at Jubilant FoodWorks, told ET.
For instance, the company has shifted its corn sourcing from the US to India and is now working with local farmers to source tomatoes to reduce imports from the US. To counter the slowdown in discretionary spending, fast-food rivals have also stepped up value meals and price discounting, in addition to launching multiple menu options at lower price points.
"The free delivery itself was a 10% hit on our margins. If you even take 4% inflation, that's nearly 20% cost we have absorbed and not given back to the consumer," Khetarpal said.
While Domino's is the market leader in the pizza segment, with about half a million pizzas sold every day on average, it trails chains such as KFC in the out-of-home chicken category.
"We have enough room to go and rather than counting where we are, we want to be in all metros. We are already in 20 cities in South India with Popeyes but the magnitude of the chicken market is huge," Khetarpal said.
"We have taken several initiatives to reduce costs. We run a programme where we look at all the cost-cutting items, including discounts, rider cost, manpower productivity, support function and rental renegotiations, but we will not increase prices for consumers," Sameer Khetarpal, managing director at Jubilant FoodWorks, told ET.
For instance, the company has shifted its corn sourcing from the US to India and is now working with local farmers to source tomatoes to reduce imports from the US. To counter the slowdown in discretionary spending, fast-food rivals have also stepped up value meals and price discounting, in addition to launching multiple menu options at lower price points.
"The free delivery itself was a 10% hit on our margins. If you even take 4% inflation, that's nearly 20% cost we have absorbed and not given back to the consumer," Khetarpal said.
While Domino's is the market leader in the pizza segment, with about half a million pizzas sold every day on average, it trails chains such as KFC in the out-of-home chicken category.
"We have enough room to go and rather than counting where we are, we want to be in all metros. We are already in 20 cities in South India with Popeyes but the magnitude of the chicken market is huge," Khetarpal said.
