Food and Restaurant sector contracts -47%; rethink’s market strategy; even as many shut shop;


Don’t we love our Dominoes’ Pizzas, Dunkin Donuts, and Honk’s Kitchen?

Jubilant FoodWorks Limited (JFL/Company), part of the Jubilant Bhartia Group, holds the master franchise rights for two international brands, Domino’s Pizza and Dunkin’ Donuts.

The Company also launched its first homegrown brand – Hong’s Kitchen in the Chinese cuisine segment.

However, things are tough for one of India’s largest foodservice Company – as it mulls shuttering down 105 unprofitable stores as the COVID – 19 pandemics has hit its business and profitability.

The Company currently operates more than 1,350 outlets for Domino’s Pizza, Dunkin’ Donuts, and Hong’s Kitchen and is a market leader in the pizza segment.

The food and restaurant segment are severely affected by the pandemics. It saw a downturn of – 47%. Many of the food retailers find themselves feeling the heat.

The food industry in India saw positive growth and great potential as many young professionals, and the average Indian grew more adventurous when it came to experimenting and experiencing different foods.

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Young professionals found it easier to order food through several and many online food delivery services.

The choices were many and catered to different food appetite and taste buds.

The Food Industry, with its expansion, also became a source of livelihood for many.

The business owners/ restaurant owners – the kitchens – employed chefs/ food preparers/ cooks; to many employed as servers; and the delivery personnel.

The entire industry worked at several levels and catered to different people’s segments providing job opportunities for many.

The lockdown put a severe strain on profitability and sustainability. With the average Indian consumers now cautious because of COVID – 19, and focus on social distancing and restraint on the number of people gatherings, this industry is not sure how it would cope with the overall impact.

Dominoes Pizzas has ensured its customers of adequate measures taken during the pandemic, and even in the lockdown, several areas could still enjoy the deliveries by this food outlet.

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In the current plan of Jubilant FoodWorks, while it is looking to shut shop many stores, it also has plans to add 100 new outlets focused more on deliveries and takeaways for the year 2021.

Jubilant has also begun a pilot of kiosk–sized Dunkin’ Donuts stores, aimed at faster payback and low Capex.

National Restaurant Association of India chief – Anurag Katriar feels that a third of the food and restaurant market is likely to be wiped out this financial year.

The Restaurant Association of India has appealed to the government for help, as has many other sectors have.

The Food and Restaurant businesses that were in a nascent stage but with tremendous growth potential suddenly find themselves without legs, unsure of what the future holds for it and the many people its employees.

Jubilant FoodWorks, being one of the largest chains, has taken the necessary and essential steps to sidestep and strategize according to ‘new normal’ in the food and restaurant business.

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However, many of the smaller chains might not be able to absorb the losses and hence have no option but to shut shop.

The Food and Restaurant industry will have to develop ways and strategize according to current market conditions. The road ahead is indeed challenging for many of them.

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