 "Fast-food majors on the fast track online")
Customer appetite for online deliveries is on the rise and traditional food retailers have started catering to this.
Raj Varman, chief executive officer of Burger King India, says his firm - the world's second-largest burger chain - has been making significant investments in strengthening its online delivery channel. With Indians finding it convenient to place online orders for food, he says, it makes perfect sense to go where the consumers are.
Rivals such as Jubilant FoodWorks and McDonald's are also taking this road.
In the past one year, Jubilant FoodWorks, the master franchisee of Domino's Pizza and Dunkin Donuts in India, has seen its online orders jump from 27 per cent to 36 per cent of total delivery sales. Ajay Kaul, chief executive of Jubilant FoodWorks, said in a recent analysts' call the jump in online orders was a result of the company's relentless focus on this channel. The plan, he said, was to take the contribution of online orders to 50 per cent of total delivery sales in the next year or so.
The trend has been no different for McDonald's, whose online orders have grown to around 40 per cent of total delivery sales in thepast year and a half, according to executives at Westlife Development, whose subsidiary Hardcastle Restaurants is the master franchisee of the brand in the west and south of the country.
Same-store sales growth for most fast-food brands in India have remained weak but online sales have gained traction.
Same-store sales growth is an indicator of growth within physical stores. It is a measure for stores a year and above in operation.
While Jubilant and Westlife Development reported positive same-store sales growth (SG) in the September quarter, the growth was marginal. Westlife's SG was 1.7 per cent for the September quarter, while Jubilant's was 3.2 per cent. Varman did not indicate the SG for Burger King stores. These stores have just touched a year of operation.
Yum! Brands, which operates Pizza Hut, KFC and Taco Bell outlets in India, saw an 18 per cent decline in the September quarter. Numbers for online sales orders were not immediately available.
But, analysts say the weakness seen in offline sales for fast-food brands is expected to stay, as discretionary spends continue to be depressed. The only option left for these brands is to tap the online channel.
Murugan Marayanaswamy, senior vice-president, marketing, Domino's Pizza India, says, "Delivery is going up due to a lot of singles and newcomers in cities. This is pushing up mobile and online ordering for us. We now want to move to the next level in online ordering, to make it as convenient as possible for consumers. We have tied up with Zippr Maps, where customers can put Zippr codes instead of typing the whole address for delivery. Tie-ups with Zomato and Foodpanda are also in place to aid online delivery."
Varman says his firm has tie-ups with third-party vendors to ensure smooth home delivery. "First, there is a robust back-end that ensures online ordering is smooth. Once the order is placed, we have these specialists who are pressed into service to ensure quick and timely deliveries," he says.
