Jubilant FoodWorks Ltd (JFL) the franchisee partner of popular fast food chains like Domino's Pizza has shut down more than half of its Dunkin' Donuts stores across the country in the last two years. According to people in the know it is now focussing more on smaller stores and kiosks to cut its losses. Jubilant FoodWorks confirmed the development and said that they have already brought down their losses to half in the June quarter.
Jubilant FoodWorks opened the first Dunkin' Donuts in India in 2012 and eventually expanded to 77 stores across the country. By end of June, however, the company brought down the number of stores to 37.
"We have shut our most unprofitable stores, cut back on restaurant operating costs and overheads, focused on core categories, and launched innovations including tea, to drive growth," a Jubilant FoodWorks spokesperson said, as mentioned in a report in The Economic Times. The spokesperson further said that they are experimenting with smaller format stores that have lower cost structures but are also adequate for the portfolio.
According to the daily, JFL Chief Executive Pratik Pota said that the company is on its way to breakeven as they make their way out of the current financial year for Dunkin' Donuts. He added that they have reduced their losses by disciplined cost cutting, tightening of manpower and labour that has led to better management of store operating costs among other manoeuvres.
Talking about how Dunkin' Donuts faced losses when its offerings of doughnuts, coffee and savouries is a combination that hardly can go wrong, Jaspal Sabharwal, cofounder of digital collaborative food industry platform Tag Taste told the daily that Dunkin'Donuts' fare is primarily suitable for the breakfast market. While that market is thriving in the developed nations, India does not have much demand for breakfast items.
Pratik Pota also added that the cafe plus bakery space, however, is growing and there is space for Dunkin' Donuts in those terms.
On the other hand, JFL reported three-fold year on year increase in its net profit for the quarter ended June 30 for Domino's Pizza. The company also opened 13 new Domino's, taking the total count to 1,144 stores.
(Edited by Anwesha Madhukalya)