Strongly believe in India story, will continue physical expansion despite COVID-19 disruptions: KFC

KFC India had a restaurant count of about 450 and at present it has over 480 restaurants

U.S.-based fast food chain Kentucky Fried Chicken (KFC) will continue to expand its restaurant network in India despite the coronavirus pandemic bringing structural changes in the business, believing the country to be a growth market in the coming years, according to a top company official.

KFC India, which opened around 30 new restaurants last year during the peak of the COVID-19-induced disruptions, is looking at adding new outlets this year too as it looks to enhance access of the brand to its consumers.

“Our intent is definitely to keep growing the brand. One of our biggest strategic pillars is what we call as access. We have to ensure that access to the brand continues to grow for the consumers, both physical and digital,” said KFC India Managing Director Samir Menon.

Despite the COVID-19 disruptions, he said, “We actually have more restaurants now than we had in pre-COVID. During the course of the year, our franchisees have opened new restaurants. So we actually are a bigger business now than we were in pre-COVID in terms of number of restaurants.” Before COVID-19 hit, KFC India had a restaurant count of about 450 and at present it has over 480 restaurants in more than 130 cities across India.

“We believe very strongly in the India story and we don’t really have any doubt that India is definitely going to be a growth market for KFC in the coming years. Definitely, it was a tough year but it hasn’t deterred us from that intent,” Mr. Menon emphasised.

From a physical access perspective, he said the company continuously identifies new trade areas and potential areas and starts setting up restaurants there through its franchise partners.

“Physical access is definitely going to be a key part of growth strategy. As the year goes, a better sense of what kind of numbers we are trying to chase will emerge. It will be more than 25 for sure,” Mr. Menon said.

With the pandemic bringing about a change in consumer behaviour with online orders and off-premise consumption growing, he said KFC India has also accelerated its efforts to address the changing consumer needs.

“I do feel our online portion of business would have grown at least by 50% between pre- and post-COVID and that has also led us to a larger shift in the way we are communicating with the consumers, a part of it is the aggregators and part of it is our own assets,” he said.

Giving a sense of how the pandemic has brought about a structural change in the business, Mr. Menon said more than half of the company’s sales were on premise in pre-pandemic times and in post-COVID, delivery has seen huge growth with over two-thirds of the business now moving to off premise, including takeaway.

On the other hand, in-premise consumption is yet to recover fully to pre-COVID levels and will take longer, he added.

“…parts of the business continue to be impacted in some states which continue to have restrictions. We are adhering to those restrictions and dine-ins can’t be open all the time…,” he said.

“In addition to that, the malls and food courts continue to have less footfalls compared to pre-COVID. We have a longer journey of recovery in those parts of business,” Mr. Menon said.

When asked about the second wave of COVID-19, he said the company is better prepared with the learnings from the year, specially on safety and hygiene protocols for dine-ins and operating through contactless deliveries.

“I think the consumers have gotten used to the way we operate now. We will make sure that in case dining rooms have to be temporarily closed again because of restrictions, we will make sure that consumers have access to the brand in a way which they would like,” he said.

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