Yum Brands’ Pizza Hut – Focus in India

In 2011, Yum! Brands created a separate autonomous subsidiary called Yum! Restaurants India for its India operations. The group’s top management team views its current stage of development in India as being similar to that in China 15 years ago. Pizza Hut currently has 40%(+) market share in China’s pizza market.
Pizza Hut Delivery (PHD) was introduced as a separate brand in the Middle-Eastern markets in 2006 and introduced in India in 2008. In 2011, the group has also started the process of segregating operations/resources at both the franchisee level as well as at the store level for PH – Pizza Hut as its dine-in restaurants and PHD as the home delivery chain.

Store Expansion in India:
Pizza Hut plans to increase the store count of PHD to 300 by 2015 from 35 in
June 2011 and Pizza Hut’s dine-in restaurants are targeted to increase from 131 currently to 250 by 2015 taking the combined store count of PH and PHD to 550 in India by 2015. Competitor Domino’s is not too far behind and has already said that they will expand in the same manner and have set a target of 750 stores by 2015.

Financials of Yum! in India
Pizza Hut in India currently generates around Rs 4bn of revenues annually. They aim to generate over US$100mn (`5bn) in annual sales only from the home delivery format by 2015. Yum! Brand’s Pizza Hut and Pizza Hut Delivery expansion plans in India form a part of a US$100m capex plan. This includes the expansion of its KFC and Taco Bell outlets as well. Yum! Brand’s decision to fund the capex for expanding their brands in India through their own resources, rather than using franchisees’ balance sheets, suggests that Yum!’s management team is serious about India.

Pizza Hut is currently present in around 43 cities across India with the top 10 cities contributing to around 70% of its total store count.

That said the going will not be easy with the entry of Pizza Express – 50:50 JV with Bharti Family. Stores expected to be launched in 2012 in Delhi and Mumbai. Others who are speculated to fight for the slice of Pizza market in India are Pizzeria Uno, Donatos, Famous Famiglia, Little Caesar’s, Round Table Pizza and Tele Pizza. Stay tuned for more coverage on the “Slice For Indian Pizza Market”.