Pizza Hut to continue aggressive expansion spree, focus on 'Gen Z', smaller markets: India MD

Leading quick service restaurant chain Pizza Hut, which had doubled its store count in the country to over 820 in the last two years, will continue its "aggressive expansion spree" with a significant commitment to expand its presence in emerging smaller markets, said a top company official.

The company is focusing on 'Gen Z' and the growing middle class, which is moving up the consumption ladder with an increased buying power, said Pizza Hut Indian Subcontinent Managing Director Merrill Pereyra.

As part of the expansion, Pizza Hut is focusing on emerging markets in Tier II and III places, which now contribute 50% of its business in India and aims to further harness the potential that exists here.

In the first quarter ending March 31, 2023, Pizza Hut India subcontinent clocked 16% system sales growth.

"In the last two years, we have doubled our estate. We have gone from 417 restaurants to 820. We plan to keep that expansion going. We believe in the country," Pereyra told PTI.

Though he did not share the projected numbers of restaurants, he said: "We have been here for 25 years and we want to keep growing. We will keep growing, and there is no reason to slow down "

In 2022, Pizza Hut India achieved robust system sales growth of 47%—the highest among all Pizza Hut subsidiaries globally.

Pereyra said in Asia (without China), there is one Pizza Hut restaurant for every three lakh people, but in India, this average is three million.

"This shows how much more we can penetrate here. This shows the opportunity how much this market can grow," he said.

Pereyra said he sees "immense potential" in expansion in India to reach young consumers in the 'untapped' Tier II and III markets.

"We have made a significant commitment to expanding our presence in emerging markets... With an aim to further harness the potential that exists in these markets, 50% of our total stores have been strategically opened in these regions," he said.

Currently, 50% of Pizza Hut's business comes from delivery and the rest is from dining and takeaway.

While talking about the growth of the domestic QSR, he said it is poised to increase with a CAGR of 11.9% in the next five years and business is going to close around $80 billion.

"There is enough growth potential in India for a business like ours for more than 10 years. The middle-class people are moving up in the buying power," he added

Pizza Hut through its two franchise partners Devyani International and Sapphire Foods operates a chain of 820 QSR stores in India spread across 200 cities

"We have maintained a long relationship with our franchisee partners, and they have been performing very well," said Pereyra.

Pizza Hut is also giving space to Indian taste palates in its menu.

"We have recently launched exciting new pizza flavours like Mazedar Makhni Paneer, Dhabe Da Keema, and Nawabi Murg Makhni to make our products even more appealing to the Indian palate," he said.

Further, the company has introduced Chicken Seekh Kebab crust, acknowledging the love Indians have for this iconic snack. "We even brought in the epic Momo Mia pizza, which allows customers to relish their most loved street food item," he said.

Pizza Hut is also available on government-backed Open Network for Digital Commerce (ONDC) platforms. According to Pereyra, it further helps them in enhancing customer reach.

"India has a vast young population, further offering ample scope for all platforms and players to grow and flourish. In this light, we view ONDC as another opportunity for us to enhance its accessibility and reach with consumers," he said.

Pizza Hut is owned by Kentucky, US-based Yum! Brands Inc, which also owns other QSR brands such as KFC and Taco Bell.