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Budget eating: On the fast food track

As companies cut back on employee entertainment and inflation squeezes family budgets, the days of full houses may have ended for many popular city restaurants, but low-cost, quick-service food joints are minting money.

india Updated: Dec 13, 2008 20:51 IST

Champagne and caviar are out. Burgers, vada pavs and pizzas are in. As companies cut back on employee entertainment and inflation squeezes family budgets, the days of full houses may have ended for many popular city restaurants, but low-cost, quick-service food joints are minting money.

“We used to go to the Park Baluchi (a high-end restaurant in Hauz Khas) twice a month. But now we’re down to going there once a month, and prefer to eat at fast-food joints. We’re trying to cut superfluous expenses,” remarks Shahana Ghose, a stay-at-home mother in Delhi.

Mukesh Malhotra, a 21-year-old BPO worker, would go out with friends once a fortnight to a restaurant like Saravana Bhavan. Now the gang opts for cheaper alternatives like Udupi Café where, says Malhotra, “You can save Rs 20 even on a dosa.”

Middle Eastern fast food joint Falafel, which has eight outlets across Mumbai, has seen a 15 per cent increase in deliveries over the last month. “More people are ordering in instead of eating out,” explains Eli Zedaka, partner.

The figures of other quick-service restaurants reflect a similar shift. McDonald’s has seen a 30 per cent increase in sales over the last year and And Pizza Hut a 7 to 8 per cent increase last month alone.

“The eating out habit won’t change overnight. People will still want to go out — but not spend as much,” says Unnat Varma, marketing director at Kentucky Fried Chicken, which has seen footfalls in its 10 outlets across the National Capital Region of Delhi increase 5 to 10 per cent from a year ago.

Fast food restaurants are also getting innovative. Pizza Hut is trying to push sales with it new ‘Magic Times’ meal that costs Rs 99 per head. HyperCity — a mega food mall in Mumbai — has launched a ‘Meals-To-Go’ business, which is growing at a 25 to 30 per cent clip. While Garcia’s Pizza, a pizza delivery service with 20 outlets in Mumbai, has started offering a super-cheap Rs 29 pizza. The parent company Amazon Foods is on track “to open 25 new outlets next year and expand to other cities like Delhi,” says Savio Fernandes, its CEO. McDonald’s, too, plans to open 40 to 45 restaurants in 2009.

For fast food, there appears to be no sign of slowdown.