Sapphire Foods India narrowed its second-quarter loss to 15 million rupees on Thursday. The company used KFC’s buy-one-get-one deals and Pizza Hut’s 299 rupee meal offers to boost sales. Revenue rose 20 percent as many customers returned. Higher energy costs and marketing spending still weighed on the firm’s overall profit margins.
Pizza Hut and KFC operator Sapphire Foods India reported a smaller quarterly loss on Thursday, helped by higher sales as the fast-food chain rolled out discounted meal offers despite higher costs. * The franchisee for US-based Yum Brands said its consolidated net loss narrowed to 15 million rupees ($158,169) for the second quarter ended September 30, from 127.7 million rupees a year earlier * Global restaurant chains, facing increasing pressure from local brands such as California Burrito, Wow Momo and Blue Tokai Coffee, have rolled out cheaper meals to drive sales * During the September quarter, KFC promoted its "buy 1 get 1" deal, while Pizza Hut offered a limited-time "sibling meal" comprising two pizzas, two garlic breads and two Pepsi starting at 299 rupees ($3.15) * Revenue from operations rose 20% to 8.88 billion rupees, with KFC posting its strongest growth in 16 quarters * Same-store sales, a key metric measuring growth at mature stores, grew 14% at KFC and 5% at Pizza Hut in India * Restaurant operators have faced higher costs since the onset of the Middle East conflict, partly due to rising utility expenses, while sustained spending on discounts has weighed on margins * Total expenses rose 17%, with Sapphire flagging "raw material and energy cost inflation and higher marketing investments" at KFC * Sapphire and larger peer Devyani International, which also operates KFC and Pizza Hut, said in January they would merge in a $934-million deal, creating a franchisee with more than 3,000 restaurants