Financial Daily from THE HINDU group of publications
Thursday, Apr 21, 2005
Yum! on expansion spree
Sindhu J. Bhattacharya
New Delhi , April 20
YUM! Restaurants International is on an expansion drive. Nine years after setting foot in India, Yum! plans to add 36 outlets this year to the 98 Pizza Huts and six Kentucky Fried Chicken (KFC) restaurants operational across the country at present.
The expansion drive will take Pizza Hut across 33 cities; KFC will set foot in Kolkata and Hyderabad after having forayed into Pune recently.
Yum! also plans expansion in neighbouring markets such as Sri Lanka, Mauritius and Bangladesh these markets are looked after through the Indian operations.
The restaurant chain has 20 outlets in Sri Lanka, 15 in Mauritius and has opened the first one in Bangladesh.
Mr Pankaj Batra, Director Marketing for the Indian Sub-continent for Yum!, asserts that Pizza Hut's sales have witnessed a 48 per cent year-on-year growth for the last three years in India. "India is a high-priority market in our global operations," he says refusing to divulge any investments the company may have made in India.
Last August, when Pizza Hut launched the Rs 50-menu, it realised that affordability is the key to success with the Indian consumer.
And continuing with this theme, it has now launched "zero-gravity" salads, again beginning at Rs 50.
Mr Batra says that ever since Pizza Hut launched the Rs 50-menu options, there has been a 40 per cent increase in transactions and the "affordability" plank will continue to be the company's marketing strategy in India.
Pizza Hut operates through the franchisee model, with each new store requiring between Rs 1 crore and Rs 1.5 crore investment by the franchisee.
Ms Sharanita Keswani, Director, KFC Marketing, says that KFC also operates on the franchisee model. "We expect to scale up to 12-13 restaurants by the end of this year, from six at present. KFC is looking at extending its presence across India to create a national footprint."
Both Pizza Hut and KFC have made various alterations to their menus in India to attract more footfalls.
For example, India is the only country in Pizza Hut's worldwide operations where it offers completely vegetarian fare.
"In Surat and Ahmedabad, we opened completely vegetarian outlets keeping in mind the local preferences. In fact, at these outlets, even the sauce used in making our pizzas has been specially developed after painstaking research to avoid onion and garlic."
KFC is also adopting a similar strategy. It has developed a range of pure vegetarian food. All the vegetarian products are stored, cooked and served separately, by a separate crew distinctly identified by their colour-coded uniform, says Ms Keswani.
Also, having realised that today's consumer is increasingly health-conscious, Pizza Hut has been experimenting with various "healthy" options.
These include fresh juices, but Mr Batra says the supply chain dynamic has to be worked out.
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