Restaurant Brands Q2 results: Loss widens to Rs 60 crore, revenue up 1%

Restaurant Brands Asia, the India franchisee of Burger King, reported a wider second-quarter loss on Monday, as budget-conscious consumers reduced spending.

Global fast-food chains are struggling to attract consumers in India, a highly price-sensitive market where consumers have been cutting back on discretionary spending due to rising prices of essentials, including food.

Burger King launched some of the cheapest menu items and deals in the industry in India, including two vegetarian burgers at 79 rupees ($1) and two pizza puffs at 59 rupees this year.

However, this was not enough to offset a demand slowdown and a surge in expenses, with Restaurant Brands Asia's loss widening to Rs 60.17 crore ($7.2 million) for the three months ending Sept. 30, from Rs 46.03 crore a year earlier.

 

Revenue rose 1%, the slowest in more than three years, to Rs 632 crore.

Same-store sales growth, a barometer of customer retention, at Indian restaurants of the chain fell 3%, compared with a 3.5% growth a year ago "due to subdued demand", Restaurant Brands Asia said in an investor presentation.

Its expenses rose 3% to 6.98 billion rupees.

The franchisee added 60 stores in India from a year earlier, taking its overall store count to 464 at September-end.

Earlier in the day, Sapphire Foods India, which operates Pizza Hut and KFC restaurants in the country, posted a surprise quarterly loss.

Westlife Foodworld, the operator of McDonald's restaurants in west and south India, last week reported a sharp drop in quarterly profit.

Yum Brands franchisee Devyani International and Domino's India operator Jubilant FoodWorks have yet to report.