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Quick service restaurants staging a quicker recovery among organised eatery businesses



New Delhi: The quick service restaurants (QSR) are staging a relatively quicker recovery in the otherwise gloomy organised eatery businesses. Industry officials said large QSR operators like McDonald’s, Domino’s, KFC and Burger King have already recovered about 50-60% of their pre-pandemic business while rebound at casual dining restaurants are still creeping up weeks after the central government allowed them to serve liquor.

Thanks to spikes in home deliveries and in takeaways, India’s QSR segment that accounts to about 5% of the overall Rs 4.23 lakh crore food services business, has regained about 60% of its pre-pandemic business.

KFC said home delivery for the US fast-food giant was already a growing part of their business. “However, the pandemic has accelerated that channel growth significantly, over 1.5x of pre-Covid levels,” said Samir Menon, managing director, KFC India. “During the pandemic, we also experienced big adoption of the takeaway channel, and firsts like ‘KFC To Your Car’.”

Robert Hunghanfoo, head of Connaught Plaza Restaurants that operates McDonald’s fast-food chain in North and East India, said the US giant is seeing “encouraging growth” in their delivery sales.

In an analyst call earlier this month, Jubilant FoodWorks, which operates Domino’s Pizza and Dunkin’ Donuts, said it expects near-normalcy of operations by the end of FY21 and the restaurant chain is witnessing gradual improvement in operating hours as well as customer confidence.

“In good markets, QSRs business is back to even 80%,” said Pankaj Renjhen, joint MD of consultancy Anarock Retail.

However, for pubs and restaurants with bars, the rebound is still a far cry. This is not so good news for them as they were pinning great hopes on booze to start in their outlets.

“Without liquor we were only 10% of the pre-Covid times but with liquor now, we are running almost 30-40%,” said Ajit Ajmani, whose company operates My Bar restaurants.

Priyank Sukhija, MD of First Fiddle Restaurants that operates large joints like Lord Of The Drinks, Plum By Bentchair, Dragonfly Experience among other chains, said the recovery rate at his more than a dozen restaurants currently operational is still around 20%. “But it is getting slightly better every week,” he said. “My business this Monday was higher than the last Monday. So it is getting better by 5-10%.”

Sukhija said before booze was allowed to be served in restaurants earlier this month, business in important market of Delhi was actually looking up with more and more people starting to come out to eat but a spike in the Covid-19 cases over the weeks in the capital put a dampener. He said the rebound is faster in Bangalore, Chennai and Kolkata at around 60% of the pre-Covid days.

As a pandemic business strategy, QSR are now pruning store sizes and planning to roll out smaller version outlets that are more skewed towards home deliveries and takeaways rather than sit-in joints.

“All QSRs are looking at reducing their spaces in the short term. They are trying to squeeze the space as much as possible to make it more efficient. People are taking their coffee and going out. Unlike in the pre-Covid days, when they would sit there,” Renjhen of Anarock said.

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