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KFC ups the ante in the fast-food space

Monday, 15 April 2013 - 9:00am IST | Place: Mumbai | Agency: dna

To invest Rs 1,100 crore in 3 years; getting into breakfast


The newly refurbished Kentucky Fried Chicken (KFC) outlet in the Andheri suburb of Mumbai is teeming with college students and office goers in the afternoon, and all seem gorging on their chicken and veg burgers.

The staff is alert making sure everything is in order – for Tarun Lal, general manager, KFC India and Area countries, is on a visit.

Over a sumptuous lunch of fiery chicken, rice and Krushers, Lal explains how Yum!, which runs the KFC chain in India, plans to raise the stakes in the QSR (quick service restaurant) space.

"For starters, we are expanding aggressively, looking to add 100 stores every year to take the count to 550 by 2015. That would mean investing anywhere between Rs850-1100 crore."

Between 2005 and 2013, the company added 230 stores.

He explains that the strategy is to get closer to the customer. And that also means the company, known for its chicken, will have to woo the vegetarians.

In line with this strategy, KFC has started offering burgers and other vegetarian items at Rs25, a price point that has so far been exclusive to McDonald's in the QSR space.

Lal said so far KFC has been perceived as an aspirational brand but in order to grow it is trying to tailor the menu for a larger customer base.

The company is now also launching the breakfast menu, something that rivals have experimented with.

"We are test-marketing the breakfast menu now, by the end of this year we will roll it out in 35-40 stores. But the real scale-up will happen only next year," he said.

KFC is also investing in brand-building through advertisements including in the digital medium.
Then there is the rather high rate of attrition, which is a malaise of the sector.

A survey done by Tata Consultancy Services and the Retailers Association of India in February showed about 33% of the respondents faced attrition levels of 100% every year.

"If we want to be the market leaders, we will have to invest significantly in people to retain the best talent," says Lal.

The chain says India is among the top three strategic markets globally and it expects to be the top dog over the next three years.

What about competition? Lal smiles as he polishes off his meal, saying: "Only time will tell who wins!"


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