Jubilant FoodWorks, which runs the Domino’s Pizza and Dunkin Donuts chains, has shut 7 Dunkin Donuts stores in the last one year.
“We are focusing on cost reduction and we want to be profitable so we have shut down loss making Dunkin Donuts stores,” said Ajay Kaul, chief executive officer, Jubilant FoodWorks on a post earnings call. The company, however, plans to add 130 to 140 Domino’s stores and 15 Dunkin Donuts (DD) outlets in FY17.
The company opened 23 new stores under the Domino’s brand in the quarter, and has 1,062 stores while Dunking Donuts has 73 stores, as of September, 2016. Jubilant has also retrenched around 1,022 employees to save costs, according to the management. The company had around 28,684 employees a year ago, according to an official statement.
The company’s net profit declined to R19 crore in Q1FY17, 31% lower year-on-year. The company’s same store sales (SSS) in Q1FY17 de-grew 3.2% year-on-year as consumer sentiment continued to remain low, Kaul said.
This is the lowest same store sales in the last seven quarters with growth coming in at 2.9% y-o-y in Q4FY16 and 4.6% y-o-y in Q1FY16, and 1.9% y-o-y in Q3FY15.
Abneesh Roy, analyst at Edelweiss Securities said that muted consumer sentiment, a shift in Ramadan dates and also delay in launch of new products hurt same store sales.
The firm’s net sales rose 6.69% y-o-y to R608.76 crore in Q1FY17 mainly on back of 23 new stores.