NEW DELHI: Over two years after it brought in USbased burger chain Carl’s Jr., CybizCorp is actively negotiating with a global pizza brand and working on a domestic beverage bar chain, both scheduled to debut in India in the first quarter of 2018-19.
So are about half a dozen big names including Bharti Family Office, Zorawar Kalra-promoted Massive Restaurants and TGI Fridays, which are expanding beyond their core brands as they adapt to a new tax regime and changing market dynamics.
“Standalone brands are not able to stand on their own. One has to hedge risks and have multiple brands; utilise learnings of global brands to launch more, and even home-grown brands,” said Sam Chopra, chairman of CybizCorp.
Bharti Family Office’s Gourmet Investments, which brought the UK brand PizzaExpress to India six years ago, is introducing its first domestic seafood brand Typhoon Shelter, besides Sri Lankan chain Ministry of Crab.
“It’s not enough to just bring in an international brand now. Consumers are looking for choices. The price-sensitive market may be stressed right now but there’s a higher-priced segment that’s growing and we’re tapping that,” said Deepinder Batth, chief operating officer at Gourmet Investments. With three back-to-back private equity deals and more in the offing, the restaurant sector is adopting an FMCG-led strategy of smaller, multiple brands in various formats and cuisines as it looks to step up earnings after a tough year that saw the rollout of the goods and services tax, the impact of demonetisation and the ban on liquor sales near highways.
In November, GST rates for most restaurants was cut to 5% from 12% to 18%. However, the government also withdrew input tax credit for restaurants where 5% GST applies. This meant such restaurants can’t claim an offset on the tax they pay on inputs against the tax on final products.
“The removal of input tax credit has really impacted profitability, so now you have to look at volumes. We’re coming up with different concepts. Multiple brands help to maximise revenue potential,” said Kalra, managing director of premium dining company Massive Restaurants.
