Food chains to tap small cities for big business

Written by Neha Pal | Neha Pal | New Delhi | Updated: Jan 27 2012, 09:02am hrs
Small cities such as Haridwar, Vapi and Rajkot would be the next big thing for food chains like Dominos, Subway and Pizza Hut, which are recording 50% growth from these places.

For instance, after opening its first store at Patna in December 2010, Dominos has expanded in the city by opening more stores across the city, at Fraser Road, Chankaya Market, Boring Road and Bari Road.

The market is also catching attention of players like Pizza Hut, Subway and Yo China. Subway, which has an outlet on East Boring Canal Road, plans to open two more, at Bakarganj and Ashiana Nagar.

Its not just Patna or Bihar. Food chains are upbeat and are strategising their plans for small towns in other states as well, where the response is expected to be phenomenal.

Dominos, which has been doing very well in small towns of Maharashtra, like Shirdi, is upbeat about opening 75 outlets in tier-II and tier-III cities, including Kota, Kozhikode, Madurai, Gangtok and Jabalpur.

According to Ajay Kaul, the CEO of Jubilant Foodworks the master franchisee of Dominos Pizza there has been a rise in demand from the smaller, untouched places where players are still thinking of exploring options for expansion. The R9,000-crore organised eating-out market is growing at a rate of 25%.

Kaul told FE, Our innovation team has strived to launch new products and since India happens to be our fastest growing market, we would plan to introduce various specialities in pizza for the small towns of India.

According to Dominos, the chain would be opening 65-70 new outlets in the next one year, half of them in tier-II and tier-III towns.

Sumit Singh, the Subway franchise owner in Patna, said, The response after opening the first Subway store has been phenomenal. Subway is also planning to open two more outlets.

KFC, which gets one-fourth of its revenue from tier-II and tier-III cities, said it products are in great demand from small towns in Punjab and Rajasthan. Dhruv Kaul, marketing director, KFC, said their spicy chicken products are getting a great response from small cities like Sangrur and Moga.