Urban consumers are eating fewer pizzas and burgers compared to the last few years. Listed QSR companies’ aggregate revenue during the second quarter has grown at 7 per cent year-on-year well below the 14 per cent CAGR achieved over FY19-24. Management of these companies attribute this to consumption slowdown as the macroeconomic environment remains challenging.

“Revenue mix for QSR firms continues to shift towards delivery amid the rising popularity of food delivery led by the rise of aggregators. There is a clear pressure on dine-in channels, which QSR companies are looking to address through initiatives such as dine-in-only offers (at lower price points) and improving the dine-in experience. In 2QFY25, delivery contributions continued to rise both year-on-year and quarter-on-quarter across QSR firms, even for dine-in-focused companies, like Barbeque Nation, which saw delivery channels gain marginally year-on-year,” BNP Paribas said in a report.

As consumption has decreased, QSR companies in 2QFY25 have increased their focus to launch more value offerings starting in the price ranges of ₹39 to ₹299. The value offerings are being done to revive demand and volumes by increasing store footfalls and gaining market share.

Attributing to low demand, QSR companies did not undertake price hikes on their products during the quarter. The demand in the category was also impacted during quarter two with Shravan and Shradh coupled with the challenging macro environment.

“The demand environment remains challenging across retail and mass consumption categories. Community-related external issues have been prolonged, particularly impacting dining traffic. Furthermore, erratic weather patterns are not just impacting business operations, but also leading to heightened volatility of input costs. Consequently, our same-store sales growth remained subdued at negative 6.5 per cent for the quarter, while overall sales growth stood at 1 per cent year-on-year. Our primary research indicates that eating out frequency has remained stable with a slight uptick in certain segments,” said Akshay Jatia – Executive Director of Westlife FoodWorld Ltd during the company’s second quarter earnings call.

Delivery shift

Indian consumers are now opting for fast food deliveries at home or workplace rather than dine-in at QSR.

“In 2QFY25, delivery contributions continued to rise both year-on-year and quarter-on-quarter across QSR firms, even for dine-in focused companies, like Barbeque Nation, which saw delivery channel gain marginally year-on-year. There is a clear pressure on dine-in channels, which QSR companies are looking to address through initiatives such as dine-in-only offers (at lower price points) and improving the dine-in experience,” states the BNP report.

QSR companies are moving towards reducing delivery times of fast food for consumers and are offering specially curated menus for dine-in consumers.

“The shift from dine-in to delivery continues in India and abroad. With our end-to-end delivery ecosystem—covering fleet, riders, and advanced delivery management systems—we are well-positioned to embrace this trend. We’re doubling down on reducing delivery times from 30 minutes to 20 minutes and accelerating new store openings, expanding into new cities to capture growing demand. Simultaneously, we’re committed to delivering value to our dine-in customers. Through new, dine-in-only menus, we’re seeing order growth during lunch hours—a promising shift that signals consumer preference for dining in with us,” said Hari S. Bhartia, Co-Chairman, Jubilant FoodWorks Ltd (JFL) in an earnings call.

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