Fast-food joints are looking to prop up sales as slowdown refuses to ease.
Happy hours, a concept limited to liquor, is finding its way into quick-service restaurant and cafe chains.
Dominos, the pizza chain, is giving buy-one-get-one free offer, while fine-dine restaurants such as Blue Frog in Mumbai are offering 50% discount during lunch time.
Costa Coffee has also been running a happy hour programme post 7 pm.
“These new promotions and offers such as happy hours is definitely a slowdown effect. Also, the players have been expanding at a rapid pace, which has led to some cannibalisation and also increased competition. Sales are already slow and with increasing cannibalisation it has become even tougher,” said Harminder Sahni of Wazir Advisors, a consultancy.
Devangshu Dutta of Third Eyesight said though this concept originates from bars, other retailers are also increasingly using it to drive footfalls.
“No doubt there is a slowdown and consumer sentiment has been dampened. Retailers generally use the happy hour concept during a low footfall period.”
In fact, Dominos has been witnessing the slowest growth ever since it got listed in 2010.
Since there are very few players in the quick-service restaurant space which are listed, experts believe that Dominos growth story can explain the entire industry’s scenario.
Santosh Unni, CEO Costa Coffee, said they have come up with the happy hour promotional offer to increase the coffee drinking hour.
“Typically after seven consumers don’t have coffee. With this, we are aiming at extending the hours by giving them a value for money offer.” He said with the promotional scheme, business transaction during that time has trebled.
The domestic quick service restaurant business, estimated to be Rs 3,400 crore in 2012-13, has been struggling with slowing growth in the past one year.
To provide more value offerings to the consumers, restaurants have been coming up with low price point products or increased discounts and promotions.
Experts said such promotions are going to continue and even intensify.
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