Serving up a slump: QSR players grapple with a side of demand downturn

Margin pressures could remain as sales dip and cost inflation take a bite

After a lacklustre performance in the April-June quarter (first quarter, or Q1), quick-service restaurant (QSR) players disappointed the Street once again with weak operational metrics in the July-September quarter (second quarter, or Q2) of 2023–24 (FY24).

Same-store sales, reflecting the like-to-like performance of stores operational in both periods, were either flat or experienced a decline compared to the year-ago quarter.

Despite ongoing network expansion efforts in the sector, most brokerages have revised down their operating profit and earnings estimates, anticipating at least a couple of quarters before normalisation.

Commenting on the Q2 performance, research analysts Devanshu Bansal and Vishal Panjwani