Weak demand environment to delay recovery in quick-service restaurants

Long-term trends in the hospitality sector indicate that fast food chains or Quick Service Restaurants (QSR) chains are likely to see faster growth over the next several fiscals.

However, Q4FY24 may be weak with store sales down, and intense competition cutting into margins.

While competition is intense, growth has seen non-vegetarian options starting to outpace vegetarian. KFC, for example, has an 85 per cent contribution from non-vegetarian. Popeyes, with a launch in South India, is creating a new category in fried chicken.

Chains are trying to cash in with combos and discounts and new products.

Organised players like KFC, McDonald’s,