India Retail: No major price hikes

20 Dec 2023 , 11:07 AM

Key takeaways:

1. No price hikes by both the Pizza players since IIFL’s last survey in April 2023. 
2. While the overall discounts by Domino’s on its app have increased through offers on everyday meal and “Buy 2 & Get 1”, it would not be margin-dilutive as the overall sales have gone up, while no major change on third-party platforms, which is the case for Pizza Hut as well. 
3. Domino’s made one addition to the Gourmet range, while no launches by Pizza Hut. 
4. No price actions/new launches by KFC, while Popeyes took ~8% price hike (just that Popeyes price hike is delayed, KFC took it earlier) and launched zesty rice bowl range. 
5. Burger King took price hikes of ~3% since IIFL’s last survey; recently launched “Whopper: Swaad Asia, India Jaisa” campaign to promote whoopers. 
6. McDonald’s has not taken any price hike since October 2022 at the overall portfolio level (some price hikes offset by reduction in cut in value meal prices); launched “Cheesy Burger” range.
7. BBQ has broadly maintained prices at the portfolio level; while cash discounts have increased on Zomato so has the minimum order value.

Pizzas

• Price increases: Cumulatively, Domino’s and Pizza Hut have not taken any price hike, over the last 12 months.
• Price comparison: Based on the latest delivery prices through third-party players, Pizza Hut is at 19-20% premium to Domino’s versus 10-11% during April 2023. However, the gap has widened due to rise in packing charges in case of Pizza Hut and higher discounts in case of Dominos.
• Promotions: While cash discounts by Domino’s on its app have reduced, on an overall basis, the discounts have increased through non-cash discounts like everyday meal and “Buy 2 Get 1”. On Zomato, Pizza Hut is offering cash discount of Rs. 80 — same as in April 2023.
• New launches: Domino’s launched new hot spicy range of Pizzas in July 2023, starting at Rs. 179. Pizza Hut has recently introduced new 14-inch pizza in the Family range on a pilot basis.

Fried chicken

• Price increases: While KFC has not taken any price increase since IIFL’s last survey in April 2023, Popeyes took ~8% increase. KFC had taken 3-4% price hike in April 2023 and even more in CY22, though Popeyes did not.
• Promotions: KFC is offering free items on minimum order value of Rs. 499 only on Fridays on its app. Currently, on third-party platforms, there are no cash discounts versus Rs. 50 in the last survey. Popeyes on its app is offering a 10% discount of up to Rs. 100 on orders above Rs. 499.
• New launches: KFC has not launched any new products since June 2023, where they introduced snackers starting at Rs. 99; whereas Popeyes launched its zesty rice bowl range in December 2023.

Burgers

• Price increases: Compared to IIFL’s April survey, Burger King took price hikes of ~3% across its portfolio; whereas McDonald’s has not taken any major price hike since October 2022 at the portfolio level. 
• Promotions: On third-party platforms, McDonald’s is offering 40% discount of up to Rs. 80 on an order value above Rs. 199; BK is offering cash discounts of Rs. 100 on orders of Rs. 499. On McDonald’s app, offers are the same as IIFL’s last survey; while on the Burger King app, cash discounts have reduced compared to IIFL’s previous survey.
• New launches: McDonald’s launched its Cheesy Burger range in October 2023, starting at Rs. 145. BK launched a new campaign “Whopper: Swaad Asia, India Jaisa”, where they introduced new flavors of veg and chicken whoopers in October 2023.

Casual dining

• Price increases: Barbeque took ~3% price hikes since IIFL’s previous survey. However, considering the higher share of Dine in Buffet option, effectively they have maintained prices.
• Promotions: On Zomato, Barbeque is offering discount of 30% up to Rs. 75, on order value above Rs. 199, flat Rs. 100 off on order value above Rs. 799 and 15% off on minimum order value of Rs. 1,200, the minimum order value has increased since last survey. On its app, Barbeque is not offering any cash discount. Also, recently they have launched Aamchi Biryani festival from 5^th to 20^th December in Maharashtra and Gujarat.