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Insight of the Day: Rs 99 combos fail to impress consumers as dining habits change

The fast-food industry in India is facing challenges as consumer habits and economic conditions change. Leading brands in the industry, such as Jubilant Foodworks, Devyani International, and Sapphire Foods India, are experiencing a decline in earnings due to cash-strapped consumers reducing their dining out and ordering in activities.

In an attempt to attract customers, fast-food chains have introduced new affordable menu items, including Burger King's 99-rupee combination deals and burger prices starting at just Rs 49. However, these efforts have failed to make a significant impact as consumers are not responding favorably, likely due to India's persistently high inflation rates.

Consumer behavior has shifted, with people now visiting fast-food chains less frequently. Instead of visiting three or four times a month as before, consumers are now restricting their visits to once or twice a month. This change in behavior is impacting the net income and same-store sales of major players in the industry.

Despite the challenges, franchisees are still expanding their reach across the country. Operators like Sapphire and Devyani, which also manage KFC stores, are opening new restaurants in various locations, indicating their long-term commitment to growth. However, immediate earnings growth is difficult to achieve due to stiff competition from local players like La Pino'z, Jumboking, and Biggies Burger.

Overall, the fast-food industry in India is facing a decline in earnings as consumer habits change and inflation rates remain high. Brands are struggling to attract customers with affordable menu items, and competition from local players adds further pressure on the industry.


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