Pizza Hut to increase its delivery business in India over the next year, company executive says; more than 60% of pizza chain's stores slated to open in nation over next 12 months will be delivery outlets

Nevin Barich

NEW DELHI , August 16, 2013 (Mint ) – Fast food chain Pizza Hut will scale up its delivery business over the next year.

Of the 50 new Pizza Hut stores that Yum! Restaurants India will open over the next 12 months, close to 33 will be delivery outlets, said Sandeep Kataria, brand general manager at Pizza Hut and chief marketing officer at Yum! India, which also manages the Kentucky Fried Chicken restaurant chain in the country.

The remaining Pizza Hut outlets will be restaurants built on 1,000 to 4,000 sq. ft. The brand operates 148 full-service restaurants and 117 delivery outlets, a format it launched in 2007.

"The idea is get to more localities," Kataria said in an interview on Wednesday.

The pizza chain is also focusing on streamlining costs as consumers cut back on discretionary spends.

Food and beverage retailers across the country are grappling with inflationary pressure and muted consumer sentiment, as sales slip.

Same-store sales growth at competing pizza chain Domino's, which is run by Jubilant FoodWorks Ltd, slipped significantly in the first quarter of FY14, growing at 6.3%, as consumers continued to cut back on discretionary spends.

In a press statement released earlier this month the company maintained that same-store sales, "has moderated from earlier levels following constrained discretionary spends on account of slowing economic growth."

Over the past six-eight weeks, Pizza Hut has undertaken some cost-cutting exercises in a bid to alleviate muted consumer sentiment. "There is a bit of a cautious approach as consumer are being careful on discretionary spends," Kataria said.

He said the company will continue to sell lower-priced dishes in a bid to ensure volume growth and to achieve scale.

He said the company, which owns brands such as Pizza Hut and KFC, is on target to open 1,000 restaurants by 2015. Yum! operates a total of 500 restaurants in India. Published by HT Syndication with permission from MINT. For any query with respect to this article or any other content requirement, please contact Editor at htsyndication@hindustantimes.com

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