Pizza Hut, the leading quick-service restaurant chain, has made remarkable strides in expanding its presence over the past two years. With a doubling of its store count to over 820 locations, the company has solidified its position in the market. Looking ahead, Pizza Hut shows no signs of slowing down its growth trajectory. A top company official has confirmed the brand’s commitment to an “aggressive expansion spree,” with a particular focus on emerging smaller markets. This strategic move aims to further strengthen Pizza Hut’s foothold and capitalize on untapped opportunities.
According to Merrill Pereyra, the Managing Director of Pizza Hut Indian Subcontinent, the company has shifted its focus towards two key demographics: ‘Gen Z’ and the expanding middle class. This middle class is steadily progressing up the consumption ladder, exhibiting greater purchasing power.
Pizza Hut is prioritizing its growth strategy by targeting emerging markets in Tier II and III cities. These markets already account for 50 percent of its business in India, and the company aims to capitalize on the untapped potential that lies within these areas.
During the first quarter, which concluded on March 31, 2023, Pizza Hut India Subcontinent achieved an impressive 16 percent growth in System Sales.
“In the last two years, we have doubled our estate. We have gone from 417 restaurants to 820. We plan to keep that expansion going. We believe in the country,” said Pereyra.
Though he did not share the projected numbers of restaurants, he said, “We have been here for 25 years and we want to keep growing. We will keep growing and there is no reason to slow down.”
In 2022, Pizza Hut India accomplished an impressive System Sales Growth of 47 percent, surpassing all other Pizza Hut subsidiaries worldwide.
Pereyra stated that in Asia (excluding China), there is approximately one Pizza Hut restaurant for every 300,000 people, whereas in India, this ratio is significantly higher, with one restaurant for every 3 million people.
“This shows how much more we can penetrate here. This shows the opportunity how much this market can grow,” he said.
According to Pereyra, there lies “enormous potential” in expanding into India to connect with the youthful consumer base within the ‘untapped’ Tier II and Tier III markets.
“We have made a significant commitment to expanding our presence in emerging markets… With an aim to further harness the potential that exists in these markets, 50 per cent of our total stores have been strategically opened in these regions,” he said.
Presently, Pizza Hut’s business is divided, with 50 percent of their revenue stemming from delivery services, while the remaining portion originates from dining and takeaway sales.
While discussing the expansion of the domestic QSR (quick service restaurant) industry, he mentioned that it is positioned to experience a Compound Annual Growth Rate (CAGR) of 11.9 percent over the next five years, resulting in a market worth around USD 80 billion.
“There is enough growth potential in India for a business like ours for more than 10 years. The middle-class people are moving up in the buying power,” he added.
In India, Pizza Hut operates a network of 820 quick-service restaurants (QSR) across 200 cities through its two franchise partners, Devyani International Ltd and Sapphire Foods.
“We have maintained a long relationship with our franchisee partners, and they have been performing very well,” said Pereyra.
Pizza Hut’s menu also caters to the Indian taste palates, offering a delightful array of options.
“We have recently launched exciting new pizza flavours like Mazedar Makhni Paneer, Dhabe Da Keema and Nawabi Murg Makhni to make our products even more appealing to the Indian palate,” he said.
Further, the company has introduced Chicken Seekh Kebab crust, acknowledging the love Indians have for this iconic snack. “We even brought in the epic Momo Mia pizza, which allows customers to relish their most loved street food item,” he said.
Pizza Hut has expanded its presence by joining the government-supported Open Network for Digital Commerce (ONDC) platforms. This move, as stated by Pereyra, not only enhances their customer reach but also contributes to their overall growth.
“India has a vast young population, further offering ample scope for all platforms and players to grow and flourish. In this light, we view ONDC as another opportunity for us to enhance its accessibility and reach with consumers,” he said.
Pizza Hut is owned by Kentucky, US-based Yum! Brands Inc, which also owns other QSR brands such as KFC and Taco Bell.
