Pizza Hut plans to scale up to Domino's size
Devyani International has launched its thousandth outlet. The company plans to open 1,000 more stores in the next four-five years. Ravi Jaipuria, Chairman, and Virag Joshi, CEO, spoke to CNBC-TV18 on the company's expansion plans
Devyani International launched Pizza Hut in June 1996 in Bengaluru and after more than 26 years it opened its thousandth outlet. The company, which also has the likes of KFC and Costa Coffee brands under its wing, now has serious expansion plans and wants to open 1,000 more outlets in the next four years.
In the process, they want to take Pizza Hut to a position where it can compete with the giant of the game — Dominos. As per a few reports, by the end of 2021, Dominos had 1,400 stores in India.
Devyani International's chairman Ravi Jaipuria and chief executive officer Virag Joshi spoke to CNBC-TV18 and elaborated on this.
“Today, we are opening the 1,000th store and we are looking at another 1,000 stores in the next four years. That is the average we are looking at across four brands, which is Pizza Hut, KFC, Costa Coffee, and our own brand, Vaango,” said Jaipuria.
The split in terms of additional stores, Jaipuria said, will be equal. "We are targeting about 100 stores each (Pizza Hut and KFC) per year and the balance would be for Costa Coffee and Vaango.”
The management said it was aware that it was a long journey towards reaching the size of Dominos, but believes that the key difference is the number of stores.
“Our key issue is going to be how fast we can scale it to a level where when a person wants to order a pizza from Pizza Hut, we are able to deliver it,” Jaipuria explained.
“We are as profitable as Dominos, practically, and with the volume that is much lower than theirs," he added.
Devyani International's stock is up 25 percent in the past year but has seen a dip of 6 percent odd in the past six months as the markets have corrected. Comparatively, Jubilant FoodWorks, which runs Dominos, has dropped 26 percent in the same period.
On same-store-sales growth, Joshi said: “We have already said that we are looking at about 4-5 percent growth in KFC and about 6-7 percent in Pizza Hut.”
However, it is the delivery business that is the most important growth path for both the chains and the numbers on that front are looking robust.
“Our delivery business in Pizza Hut is going up to about 50-60 percent of our business. So, the experience on the delivery piece, keeping in hygiene, safety and all in mind, we are in the sweet spot today,” said Joshi.
For the entire discussion, watch the accompanying video
(Edited by : Abhishek Jha)
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