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)