How many Pizzas do you think we ate in 2013?
Here are some relevant food sales figures for all (to be?) food retailers out there! Help yourself.
At IREFD, we have been discussing and mostly guessing whether the general bad shape of the economy has adversely affected the food retailing business or not.
So, how do you think 2013 treated the food business?
To get a solid feel of how things were going in the culinary business, we walked into a Quick Service Restaurant (QSR), and that too, at a massive 5400 Sq ft, the largest Pizza Hut restaurant in Asia! We learnt that later over a conversation with the staff. Here is what we found out.
# Dining In
- In 2012, this QSR was doing an Average Daily Sales (ASD) of about INR 1.6 lacs.
- However, 2013 has seen a shrinkage in this ASD. The figure these days stands at about 1.1 lacs.
- There has been a drop of about 31.25% in the Average Daily Sales Revenue.
# Home Deliveries
- The year 2012 saw a food delivery revenue of about INR 25 thousand per day.
- 2013 figures so far have been hovering around the INR 19 thousand mark daily.
- There has been a drop of about 24% in pizza (and pasta if you want it that way) delivery revenues over last year.
# Reasons behind the decline in sales at this QSR as per their staff.
- A new QSR from the same brand has opened up in close proximity, eating into the market share of this one.
- This particular QSR we went to is located on a high street in a small retail hub that does not have any entertainment options like a multiplex or a family entertainment centre. The staff see that as a big reason why sales did not grow.
- QSRs with multiplexes and other entertainment options in the same premises do better, we are told.
- All businesses are slower in general these days. People are spending lesser on anything that is not a necessity, thanks to high inflation and battered sentiments.
- The smaller cities of India is where the action is for large QSR brands like Pizza Hut. At Siliguri, a small city in East India, their newly opened QSR is raking in an Average Daily Sales revenue of close to INR 1.7 lacs as we write this. But we reckon that this initial euphoria and the high revenues will settle down at a significantly lower but respectable ADS number.
# Take Away for Foodies, Food Retailers, To Be Food Retailers and Angry Mobs
- If your local or non Multi-Location QSR is located far away from a mall with a multiplex and loads of people, chances are that 2013 has not been the best year for you. You should think of shifting into a shopping mall with the works. It is still the safest bet if your food or brand is not legendary yet.
- You are seeing a 35% to 50% drop in business volumes lately. Do not panic. It is absolutely cool. Lower fixed costs, improve services and re work the menu. Re plan your finances based on lower APCs.
- If you were wondering why KFC and McDonald's were trying to feed an army for 25 bucks, you should now stop and focus on how your QSR can do the same for 15 bucks. Thank you.
- Dear Landlords, the broker who told you that in the next 10 years, your rent/ revenue share would become two and a half times of what it is currently, conned you to kingdom come. That day will never come. There is simply not that much margin in the food business anymore, especially with sales down by a third of what they were last year.
- The revenues in the food business will bounce back towards the end of 2014 to new highs, if all goes well and your QSR has survived that long.
- December 10th onward is boom time for the food and beverages business. Every year. That leaves you with very little time to prepare, practice and perfect what you are serving to your guests in a few days from now.
- We will eat many more pizzas in 2014 than we did in 2013.
End of quick report. Cheers!
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| Here is a slice of our side of findings about the food business in 2013 |
So, how do you think 2013 treated the food business?
To get a solid feel of how things were going in the culinary business, we walked into a Quick Service Restaurant (QSR), and that too, at a massive 5400 Sq ft, the largest Pizza Hut restaurant in Asia! We learnt that later over a conversation with the staff. Here is what we found out.
# Dining In
- In 2012, this QSR was doing an Average Daily Sales (ASD) of about INR 1.6 lacs.
- However, 2013 has seen a shrinkage in this ASD. The figure these days stands at about 1.1 lacs.
- There has been a drop of about 31.25% in the Average Daily Sales Revenue.
# Home Deliveries
- The year 2012 saw a food delivery revenue of about INR 25 thousand per day.
- 2013 figures so far have been hovering around the INR 19 thousand mark daily.
- There has been a drop of about 24% in pizza (and pasta if you want it that way) delivery revenues over last year.
# Reasons behind the decline in sales at this QSR as per their staff.
- A new QSR from the same brand has opened up in close proximity, eating into the market share of this one.
- This particular QSR we went to is located on a high street in a small retail hub that does not have any entertainment options like a multiplex or a family entertainment centre. The staff see that as a big reason why sales did not grow.
- QSRs with multiplexes and other entertainment options in the same premises do better, we are told.
- All businesses are slower in general these days. People are spending lesser on anything that is not a necessity, thanks to high inflation and battered sentiments.
- The smaller cities of India is where the action is for large QSR brands like Pizza Hut. At Siliguri, a small city in East India, their newly opened QSR is raking in an Average Daily Sales revenue of close to INR 1.7 lacs as we write this. But we reckon that this initial euphoria and the high revenues will settle down at a significantly lower but respectable ADS number.
# Take Away for Foodies, Food Retailers, To Be Food Retailers and Angry Mobs
- If your local or non Multi-Location QSR is located far away from a mall with a multiplex and loads of people, chances are that 2013 has not been the best year for you. You should think of shifting into a shopping mall with the works. It is still the safest bet if your food or brand is not legendary yet.
- You are seeing a 35% to 50% drop in business volumes lately. Do not panic. It is absolutely cool. Lower fixed costs, improve services and re work the menu. Re plan your finances based on lower APCs.
- If you were wondering why KFC and McDonald's were trying to feed an army for 25 bucks, you should now stop and focus on how your QSR can do the same for 15 bucks. Thank you.
- Dear Landlords, the broker who told you that in the next 10 years, your rent/ revenue share would become two and a half times of what it is currently, conned you to kingdom come. That day will never come. There is simply not that much margin in the food business anymore, especially with sales down by a third of what they were last year.
- The revenues in the food business will bounce back towards the end of 2014 to new highs, if all goes well and your QSR has survived that long.
- December 10th onward is boom time for the food and beverages business. Every year. That leaves you with very little time to prepare, practice and perfect what you are serving to your guests in a few days from now.
- We will eat many more pizzas in 2014 than we did in 2013.
End of quick report. Cheers!
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