JUBLFOOD gives indication no pizza price cut unless milk, cheese prices dip below year ago level

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Domino’s pizzas to taste costlier unless milk and cheese prices fall below year ago level. As per CPI for June, 2023, milk and products inflation was 8.56%. Jubilant FoodWorks, CEO and MD, Sameer Khetarpal, has said, cheese prices have remained high in last one year. Jubilant FoodWorks (master franchise of Domino’s Pizza in India) will think about pizza price revision only if cheese and milk prices fall below year ago level.

According to IIFL Securities, in the last 18 months, Domino’s pizzas have become costlier by average of 10%. People continue to order pizzas sitting at home rather than choosing to walk into restaurants. In quarter ending June, 2023, Jubilant FoodWorks saw fall in footfalls in its stores in malls on sequential basis. At the same time, the QSR chain saw surge in online orders.

However, Khetarpal, has said, that, looking at order trend, demand environment continues to be uncertain. Jubilant FoodWorks is seeing continuous fall in ticket size. The QSR chain is trying to lure customers by offering combos and mid range pizzas.

As part of new offering in June quarter, Domino’s launched spicy pizza range. The price of spicy pizza range starts from Rs 179. Domino’s deliberately priced the latest offering a bit higher. If customers go for combos and mid range pizzas, then, it will help Jubilant in improving ticket size.

So far, the QSR chain tried to lure customers by offering pizzas for as low as Rs 49. It did strike success at grabbing an extra bite of the pie of the market share. But, Jubilant FoodWorks is seeing continuous fall in ticket size for quite a time. Now, Jubilant wants to lure customers by offering mid range pizzas to up its ticket size.

Khetarpal hopes demand will improve going forward if input prices do not rise abruptly.

According to Khetarpal, people in India are liking Indian styled Chinese cuisines of Hong’s Kitchen very much. Jubilant FoodWorks holds master franchise of Hong’s Kitchen in India. Strong demand for Indian styled Chinese has led volume growth of Hong’s Kitchen in the June quarter.

People have also liked sandwich, bun and boneless chicken of US based QSR chain Popeyes. Jubilant FoodWorks holds master franchise of Popeyes as well.

Nevertheless, despite of patchy demand trend in the economy, Jubilant FoodWorks wants to go ahead with store expansion plan. The QSR chain wants to penetrate deep into the country by opening new stores in tier III and tier IV cities as well. As of Q1 FY24, there were 1,838 stores of Domino’s India.