Domino’s Pizza set for mega India expansion
Domino’s Pizza Inc. will significantly ramp up its retail store network in India as it bets on growing appetite for its products in its largest market outside of the US by store count, senior company executives said. As part of the plan, Jubilant FoodWorks Ltd, the Indian franchise of Domino’s, will add another 1,300 stores across the country, taking its store count to 3,000. The company currently runs 1,701 Domino’s stores across 371 cities.
Domino’s announced the formal launch of its 20-minute pizza delivery in India, making it the first market globally. The quick delivery promise, which Domino’s has been trying to perfect for a while, has been for now introduced in 20 zones across 14 cities, Jubilant said in a regulatory filing. This means that the company will now have to build a wider network of stores and ensure its hot pizzas reach consumers on time. The move is being driven by enhancing and optimizing in-store process improvements, technology upgradation, interventions for improved operational efficiencies, and expanding stores within the vicinity, according to Jubilant.
Quicker delivery of pizzas will significantly grow sales volumes, increase consumer retention as well as frequency of orders and make labour cost more efficient, executives at Domino’s said. “Domino’s is in 95 markets around the world. We have 19,000, going on 20,000 stores, and the number one market outside of the US is India. So, we’re very proud of it. The rate of growth is also tremendous. I believe the goal is to open about 250 stores this year. It (Jubilant) also has a medium term goal of getting to 3,000 stores, which is incredible for the brand,” said Russell Weiner, chief executive, Domino’s. The move comes amid intensifying competition in India’s fast food market. Domino’s, which first entered the market in the late 90s, has the largest retail network for a fast-food chain. India’s quick service restaurant market is forecast to climb to ₹534 billion by FY25 from ₹145 billion in FY21, according to a Technopak study.
Domino’s, the world’s largest pizza chain by stores, remains the market leader in India, followed by Pizza Hut. However with consumer tastes, preferences and reach changing, several indigenous pizza brands are able to make a mark, analysts at ICICI Securities said in a report earlier this year.
Art D’Elia, executive vice president, international, Domino’s said the 20-minute delivery promise could be replicated in other markets. “When we look at consumer data, the NPS scores and the retention and frequency increased dramatically when we deliver a pizza in under 20 minutes—it’s hotter, it’s fresher, it’s a much better product. And that data holds true around the globe. This is just the first place that we’re launching this initiative,” he said. India will lead store expansion for the pizza chain outside of the US over the next 4-5 years, he added.
Meanwhile, Sameer Khetarpal, CEO and managing director at Jubilant said the move to deliver pizzas within 20 minutes will lead to higher customer retention rates, help acquire new customers, while also ensuring that the existing stores see faster growth.
More stores means more supply chain infrastructure to be able to feed those stores, D’Elia said.
Jubilant is also investing aggressively in setting up new supply chain centres and infrastructure, he added. “To provide that kind of service, you need to make sure that you shrink your delivery areas so that promotes store growth and is part of the business case behind opening more stores,” he said.
Jubilant also holds the master franchise for Domino’s Pizza in Sri Lanka, Bangladesh and Nepal. In Sri Lanka and Bangladesh, the company operates through its 100% owned subsidiary which currently has 40 and 11 restaurants respectively. Jubilant FoodWorks also holds exclusive rights to develop and operate Dunkin’ and Popeyes restaurants in India, Bangladesh, Nepal and Bhutan.
In FY22, Jubilant’s revenue from operations stood at ₹4331.1 crore.