KFC India operator Sapphire posts smaller loss as meal deals drive demand

Oct 22 (Reuters) - Pizza Hut and KFC operator Sapphire Foods India SAPI.NS reported a smaller quarterly loss on Thursday, helped by higher sales as the fast-food chain rolled out discounted meal offers despite higher costs.

• The franchisee for US-based Yum Brands YUM.N said its consolidated net loss narrowed to 15 million rupees ($158,169) for the second quarter ended September 30, from 127.7 million rupees a year earlier

• Global restaurant chains, facing increasing pressure from local brands such as California Burrito, Wow Momo and Blue Tokai Coffee, have rolled out cheaper meals to drive sales

• During the September quarter, KFC promoted its "buy 1 get 1" deal, while Pizza Hut offered a limited-time "sibling meal" comprising two pizzas, two garlic breads and two Pepsi starting at 299 rupees ($3.15)

• Revenue from operations rose 20% to 8.88 billion rupees, with KFC posting its strongest growth in 16 quarters

• Same-store sales, a key metric measuring growth at mature stores, grew 14% at KFC and 5% at Pizza Hut in India

• Restaurant operators have faced higher costs since the onset of the Middle East conflict, partly due to rising utility expenses, while sustained spending on discounts has weighed on margins

• Total expenses rose 17%, with Sapphire flagging "raw material and energy cost inflation and higher marketing investments" at KFC

• Sapphire and larger peer Devyani International DEVY.NS, which also operates KFC and Pizza Hut, said in January they would merge in a $934-million deal, creating a franchisee with more than 3,000 restaurants

($1 = 94.8350 Indian rupees)