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Time of India
a day ago
- Business
- Time of India
QSR firms' margins under pressure, food delivery firms show improvement
The Quick Service Restaurants (QSRs) are facing pressure on margins due to factors like inflation, while the food delivery firms have seen improvement in their margins, according to a report. QSR firms have also slowed the pace of store expansion, the report from banking firm BNP Paribas said. Further, the report mentioned that now food aggregators such as Swiggy and Zomato have become larger over the last few years and provided reach to the restaurants smaller than QSR chains. "This, we believe, has resulted in increased competition for the listed QSR companies. Over the last four years, margins of food delivery firms have increased, while QSR margins have remained under pressure," it said. Moreover, online food aggregators have launched their own dark kitchen brands , Bistro and Snacc, respectively, offering 10-15 minute food delivery through dedicated apps. "This intensifies competition in the Indian QSR market , compelling existing players to innovate on speed, menu and delivery efficiency to maintain market share and remain profitable," it said. Amidst continued demand slowdown, QSR companies are refraining from taking any major price hike and focusing on value propositions for customers. "Though discounts are now being customised to target specific customers, the pressure on margins remains due to lower ADS (average daily sales) and rising delivery mix," it said. Moreover, rapid store expansion, coupled with higher operating costs, has kept EBITDA margin expansion at bay. "However, aggregators continue to improve their margins, even as margin pressure on QSR companies persists," it said. Though QSR firms have "incremental positives" such as reduction in income tax and lowering bank interests, which will help to trigger the demand, however, they "have been reluctant to raise prices due to weak demand". "Aggregate sales of Indian listed QSR chains increased by 10 per cent in FY25 vs 9 per cent in FY24. This was well below food delivery firms' gross order value (GOV) growth at 19 per cent in FY24 and 18 per cent in FY25," it said. QSR companies, such as Jubilant Foods, are facing raw material inflation, but due to weak demand, they have been reluctant to raise prices. However, " food delivery margins have improved sharply over FY22-25, indicating better pricing power," it added. In Q4FY25, the QSR companies continued their double-digit revenue growth momentum. Three of the top five listed QSR players delivered double-digit revenue growth, with Jubilant Foods leading at 19 per cent year-on-year. "However, growth was still below the 13 per cent CAGR (compound annual growth rate) achieved over FY20-25. The companies attribute it to a tougher urban consumer demand environment and reduced outside food consumption, but expect it to rebound, led by income tax rate cuts and other government initiatives," it said. PTI
Time of India
2 days ago
- Business
- Time of India
QSR firms' margins under pressure, food delivery firms show improvement
The Quick Service Restaurants (QSRs) are facing pressure on margins due to factors like inflation, while the food delivery firms have seen improvement in their margins, according to a report. QSR firms have also slowed the pace of store expansion, the report from banking firm BNP Paribas said. Further, the report mentioned that now food aggregators such as Swiggy and Zomato have become larger over the last few years and provided reach to the restaurants smaller than QSR chains. "This, we believe, has resulted in increased competition for the listed QSR companies. Over the last four years, margins of food delivery firms have increased, while QSR margins have remained under pressure," it said. Moreover, online food aggregators have launched their own dark kitchen brands , Bistro and Snacc, respectively, offering 10-15 minute food delivery through dedicated apps. "This intensifies competition in the Indian QSR market , compelling existing players to innovate on speed, menu and delivery efficiency to maintain market share and remain profitable," it said. Amidst continued demand slowdown, QSR companies are refraining from taking any major price hike and focusing on value propositions for customers. "Though discounts are now being customised to target specific customers, the pressure on margins remains due to lower ADS (average daily sales) and rising delivery mix," it said. Moreover, rapid store expansion, coupled with higher operating costs, has kept EBITDA margin expansion at bay. "However, aggregators continue to improve their margins, even as margin pressure on QSR companies persists," it said. Though QSR firms have "incremental positives" such as reduction in income tax and lowering bank interests, which will help to trigger the demand, however, they "have been reluctant to raise prices due to weak demand". "Aggregate sales of Indian listed QSR chains increased by 10 per cent in FY25 vs 9 per cent in FY24. This was well below food delivery firms' gross order value (GOV) growth at 19 per cent in FY24 and 18 per cent in FY25," it said. QSR companies, such as Jubilant Foods, are facing raw material inflation, but due to weak demand, they have been reluctant to raise prices. However, " food delivery margins have improved sharply over FY22-25, indicating better pricing power," it added. In Q4FY25, the QSR companies continued their double-digit revenue growth momentum. Three of the top five listed QSR players delivered double-digit revenue growth, with Jubilant Foods leading at 19 per cent year-on-year. "However, growth was still below the 13 per cent CAGR (compound annual growth rate) achieved over FY20-25. The companies attribute it to a tougher urban consumer demand environment and reduced outside food consumption, but expect it to rebound, led by income tax rate cuts and other government initiatives," it said. PTI
Time of India
2 days ago
- Business
- Time of India
QSR Firms: Food Delivery Firms Thrive as QSRs Struggle with Margin Pressures, ET HospitalityWorld
Advt Advt Join the community of 2M+ industry professionals Subscribe to our newsletter to get latest insights & analysis. Download ETHospitalityWorld App Get Realtime updates Save your favourite articles The Quick Service Restaurants (QSRs) are facing pressure on margins due to factors like inflation, while the food delivery firms have seen improvement in their margins, according to a report. QSR firms have also slowed the pace of store expansion, the report from banking firm BNP Paribas the report mentioned that now food aggregators such as Swiggy and Zomato have become larger over the last few years and provided reach to the restaurants smaller than QSR chains."This, we believe, has resulted in increased competition for the listed QSR companies. Over the last four years, margins of food delivery firms have increased, while QSR margins have remained under pressure," it online food aggregators have launched their own dark kitchen brands , Bistro and Snacc, respectively, offering 10-15 minute food delivery through dedicated apps."This intensifies competition in the Indian QSR market , compelling existing players to innovate on speed, menu and delivery efficiency to maintain market share and remain profitable," it continued demand slowdown, QSR companies are refraining from taking any major price hike and focusing on value propositions for customers."Though discounts are now being customised to target specific customers, the pressure on margins remains due to lower ADS (average daily sales) and rising delivery mix," it rapid store expansion, coupled with higher operating costs, has kept EBITDA margin expansion at bay."However, aggregators continue to improve their margins, even as margin pressure on QSR companies persists," it QSR firms have "incremental positives" such as reduction in income tax and lowering bank interests, which will help to trigger the demand, however, they "have been reluctant to raise prices due to weak demand"."Aggregate sales of Indian listed QSR chains increased by 10 per cent in FY25 vs 9 per cent in FY24. This was well below food delivery firms' gross order value (GOV) growth at 19 per cent in FY24 and 18 per cent in FY25," it companies, such as Jubilant Foods, are facing raw material inflation, but due to weak demand, they have been reluctant to raise " food delivery margins have improved sharply over FY22-25, indicating better pricing power," it Q4FY25, the QSR companies continued their double-digit revenue growth momentum. Three of the top five listed QSR players delivered double-digit revenue growth, with Jubilant Foods leading at 19 per cent year-on-year."However, growth was still below the 13 per cent CAGR (compound annual growth rate) achieved over FY20-25. The companies attribute it to a tougher urban consumer demand environment and reduced outside food consumption, but expect it to rebound, led by income tax rate cuts and other government initiatives," it said. PTI
Time of India
2 days ago
- Business
- Time of India
QSR Firms: Pressure on QSR Margins as Food Delivery Firms Flourish, ET HospitalityWorld
Advt Advt Join the community of 2M+ industry professionals Subscribe to our newsletter to get latest insights & analysis. Download ETHospitalityWorld App Get Realtime updates Save your favourite articles Scan to download App The Quick Service Restaurants (QSRs) are facing pressure on margins due to factors like inflation, while the food delivery firms have seen improvement in their margins, according to a report. QSR firms have also slowed the pace of store expansion, the report from banking firm BNP Paribas the report mentioned that now food aggregators such as Swiggy and Zomato have become larger over the last few years and provided reach to the restaurants smaller than QSR chains."This, we believe, has resulted in increased competition for the listed QSR companies. Over the last four years, margins of food delivery firms have increased, while QSR margins have remained under pressure," it online food aggregators have launched their own dark kitchen brands , Bistro and Snacc, respectively, offering 10-15 minute food delivery through dedicated apps."This intensifies competition in the Indian QSR market , compelling existing players to innovate on speed, menu and delivery efficiency to maintain market share and remain profitable," it continued demand slowdown, QSR companies are refraining from taking any major price hike and focusing on value propositions for customers."Though discounts are now being customised to target specific customers, the pressure on margins remains due to lower ADS (average daily sales) and rising delivery mix," it rapid store expansion, coupled with higher operating costs, has kept EBITDA margin expansion at bay."However, aggregators continue to improve their margins, even as margin pressure on QSR companies persists," it QSR firms have "incremental positives" such as reduction in income tax and lowering bank interests, which will help to trigger the demand, however, they "have been reluctant to raise prices due to weak demand"."Aggregate sales of Indian listed QSR chains increased by 10 per cent in FY25 vs 9 per cent in FY24. This was well below food delivery firms' gross order value (GOV) growth at 19 per cent in FY24 and 18 per cent in FY25," it companies, such as Jubilant Foods, are facing raw material inflation, but due to weak demand, they have been reluctant to raise " food delivery margins have improved sharply over FY22-25, indicating better pricing power," it Q4FY25, the QSR companies continued their double-digit revenue growth momentum. Three of the top five listed QSR players delivered double-digit revenue growth, with Jubilant Foods leading at 19 per cent year-on-year."However, growth was still below the 13 per cent CAGR (compound annual growth rate) achieved over FY20-25. The companies attribute it to a tougher urban consumer demand environment and reduced outside food consumption, but expect it to rebound, led by income tax rate cuts and other government initiatives," it said. PTI
