Restaurant industry leaders divided on future amidst slowdown concerns
Sagar Daryani, Founder & CEO, WOW! Momo remains cautious about the overall outlook for the year. He believes there is a 'silent slowdown' across sectors, with reduced footfalls and changing consumption habits.
Anjan Chatterjee, CMD of Speciality Restaurants, is confident the October, November, and December (OND) quarter, 'will be the best period' for the industry as has been the trend.
And while Chatterjee acknowledges there may be some challenges in the near future, he believes the resilience of consumer interest in dining out is evident, indicating a positive trajectory for the industry.
Sagar Daryani, Founder & CEO of WOW! Momo, however, remains cautious for the year except the October-December period, as he sees a 'silent slowdown' across the industry with a decline in average footfalls as well as average order values.
Daryani is optimistic about the next financial year's prospects, particularly post-April with the anticipation of elections.
Daryani highlighted last year's impressive 90% growth from ₹200 crore to ₹400 crore contrasting with this year's challenging first half, marked by negative same-store sales growth.
Analysts have recently become wary of the 'crowded' quick service restaurants (QSR) industry, once hailed as a lucrative investment bet, due to increased competition making it challenging for established players to maintain their growth trajectories.
In an interview with CNBC-TV18 in October, Pawan Parakh of Renaissance Investment Managers explained the rationale for being cautious on QSR.
He said QSR is a highly crowded market with seemingly high gross margins. However, at the net level, it is an intensely competitive business with a plethora of players. Moreover, valuations within the QSR sector remain notably high. "As a result, Renaissance has opted to steer clear of the QSR space for the past three years and intends to maintain this position in its portfolio," he said.
(Edited by : Shweta Mungre)
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