Lured By Pre-GST Discounts, Hungry Shoppers Lift Sales Of Food Chains
Food chains gain as pre-GST sales boost footfalls in malls.
Shoppers rushed to malls as electronics and retail stores offered discounts ahead of the Goods and Services Tax. And they gorged on pizzas and burgers and took coffee breaks, helping boost sales at food outlets.
Footfalls rose during pre-GST sales, pushing up same-store sales of food and beverages outlets in the malls, said Abneesh Roy, vice-president at brokerage Edelweiss Financial Services. Improved consumer sentiment and more options on the menu also helped, he said.
Same-store sales rose for the operators of Domino’s Pizza, McDonald’s and Café Coffee Day in the quarter ended June. That’s a period when most consumer-facing companies from sectors like consumer goods, automobiles and pharmaceuticals reported lower-than-expected earnings as distributors cut inventory in the run-up to GST.
“June sales are typically slow in malls,” Anupam T, vice president, malls at Oberoi Realty, told BloombergQuint. “However, this year due to discounts being advanced ahead of the implementation of GST, malls all over the country witnessed a rise in sales.” When people come to malls to shop, they eventually end up eating there. Hence, food companies witnessed strong sales in the quarter, he said.
More To Choose From
More food options also helped the three chains. Anyone walking into a Café Coffee Day in April-May-June would have noticed additional options like Cool Jamun Slush, Citrus Cold Brew and Almond Rabdi Frappe.
McDonald’s upgraded its Happy Meals to the Happy Price Combos, giving the consumer the option to select any product and make a meal out of it. The chain also introduced its breakfast menu in more restaurants during the quarter.
“New value offerings accelerated the growth rate besides growing contributions from McCafe and Delivery,” JPMorgan said in its report on Westlife Development, which operates McDonald’s franchisees in western and southern India. The management highlighted improving consumer sentiment and is hopeful of better sales growth, it said.
McCafe’s average daily sales have been the highest since its launch, according to Anand Rathi Shares and Stock Brokers Ltd.
“Last quarter was great also because footfalls at retail locations were good,” Amit Jatia, vice-chairman of Westlife Development had told BloombergQuint after announcing its April-June results.
Domino’s too offered its consumers a special chicken range in April, while Dunkin Donuts launched the Big Joy Classic Mayo Burger and the Shaken Iced Coffee.
Improved menus and consumer sentiment, combined with higher footfalls, helped the three chains post higher sales without increasing prices, said Sachin Bobade, senior research analyst at brokerage Dolat Capital.