INDIA – Restaurant Brands Asia, which operates Popeyes and Burger King chains in India, has reported a consolidated net loss of INR 493.6 million (US$5.9 million) in Q2 2024 on a year-on-year basis, compared to a loss of INR 504.8 million (US$6.07 million) in the same quarter last year.
Although the Q2 2024 performance is a narrower loss compared to the previous quarters because of value meals and discount offers, it is the company’s 15th consecutive quarterly loss.
The performance is due to inflation challenges that have rocked quick-service chains in India over the past few years. Inflation has caused a significant increase in input and production costs, which are passed down to customers, resulting in higher prices.
The operator revealed prices of key ingredients have increased by 5% in the reported quarter.
It has also caused reduction in customers’ disposable income, making many cash-strapped customers become weary of their spending. Customers have reacted to the cash crunch by preferring to eat at home and increasingly sensitive to value offers and price of fast-food chains, causing a decline in demand.
Burger King India responded to the increasing competition and diminished demand in the quick-service restaurant sector in May by introducing the ‘Tasty Meals’ value range.
The value range, retailing from as little as INR 99 (US$1.18) includes a wide range of tacos and burgers– Vegetarian options include the Crispy Vegetarian burger meal, the Vegetarian Makhani Burst Meal, Vegetarian Crunchy Taco Meal while chicken options include the Crispy Chicken Burger Meal, Chicken Makhani Burger Meal and Chicken Crunchy Taco Meal.
The operator has praised these value meals, attributing the ‘Tasty Meals’ value range to the 6% increase in operational revenue in the reported quarter.
However, the prevailing market forces have proven problematic for all players in the quick service sector.
Rivals like Sapphire Foods, which operates Pizza Hut and KFC chains in India, reported a 68% decline in consolidated net profits in Q2 2024. Westlife Foodworld, which operates McDonald’s in India, reported an 88.7% drop in consolidated net profits in the same quarter.
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