For almost three years, the food service industry was witnessing a slump. It is in high spirits now, with the consumer spend rising, helping many big and small players turn profitable. The quarterly reports released by Yum brands, franchisee of the famous quick service restaurant chains KFC and Pizza Hut, have shown profits of 13 per cent and six per cent respectively, as against negative growth in the last 11 quarters. Other fast food chains such as Domino’s, owned by Jubilee foods Ltd, and McDonald’s are also expected to head in the same direction.
The trends in the food service industry, which is valued at Rs 3.09 lakh-crore by the National Restaurant Association of India (NRAI) and consumer research analysts Technopak, are impacted by seasonal changes and remain dependent on consumer sentiment. “The past few years had witnessed a dip in profits due to low urban spending,” says K. Ramakrishnan, former marketing head of beverages chain, Cafe Coffee Day. “But better monsoon and the Seventh Pay Commission report have reversed the trend this year.”