By Praveen Paramasivam
(Reuters) -U.S. pizza chain Papa John’s International plans to return to India by October, said a master franchisee executive, aiming to open 650 stores over the next decade in a market where fast-food chains have been struggling to sustain sales growth.
The world’s third-largest pizza delivery company, which exited India in 2017 citing underperformance, follows U.S. rival Little Caesars, which opened in India earlier this year with a target of 100 stores by the decade-end.
Papa John’s will open its first store in the southern city of Bengaluru, Vish Narain, managing partner at Pulsar Capital, told Reuters. The Indian investment house and UAE-based PJP Investments Group are Papa John’s joint master franchisees in India.
The pizza chain had revealed plans in April 2023 to re-enter the “complex market”.
Its return comes as fast-food chains grapple with weakening sales in the country, as cash-strapped urban consumers – the key customer base – cut back due to slow wage growth and as rising competition bites.
One of India’s two Pizza Hut franchisees, Devyani International, has been closing underperforming stores, while the smaller operator, Sapphire Foods India, has been cautious with its expansion plans.
The company will also face stiff competition from Domino’s Pizza, which has more than 2,200 outlets in India, Pizza Hut with about 950 stores, and smaller upscale chains such as Pizza Bakery and PizzaExpress.
Pulsar Capital is betting on India’s long-term potential, mirroring consumer-facing companies such as Dove soapmaker Hindustan Unilever and brewer Heineken that are continuing to invest in the country with an eye on its population of 1.4 billion.
The fast-food “category is under-penetrated, so we are many years away from saturation,” said Narain.
Papa John’s plans to tailor its pizza to local palates while also offering its signature pies, joining fast-food rivals offering similar fare. KFC sells a paneer zinger burger, Domino’s offers a chicken tikka pie, and Subway serves a potato-patty sandwich.
(Reporting by Praveen Paramasivam in Chennai; Editing by Dhanya Skariachan and Janane Venkatraman)
Comments