- KFC introduced Double Chicken Dynamite and Shawarma in the June quarter
- Burger King India launched Korean and peri-peri products, boosting traffic
- Burger King reported 12.6% same-store sales growth in the June quarter
Two chicken fillets, with noodles and cheese between them.
That is how Sapphire Foods India Ltd. Group Chief Executive Officer Sanjay Purohit described KFC's Double Chicken Dynamite during the company's June-quarter earnings call. The chain also introduced KFC Shawarma during the quarter.
"Both products are fantastic products," Purohit told analysts while describing the launches.
KFC is not alone in adding new products to its menu. Burger King India launched a Korean range and followed it with peri-peri products in July. McDonald's has also added products including a protein slice. Its operator Westlife Foodworld Ltd. has separately focused on increasing customer visits.
The launches come after the restaurant operators spent several quarters pushing lower-priced meals to bring more customers into their stores. That strategy continues, but the June quarter shows companies adding products alongside their value menus as customer visits improve.
Korean First, Peri-Peri Next
Restaurant Brands Asia Ltd., which operates Burger King in India, reported same-store sales growth of 12.6% in the June quarter, the highest in 15 quarters.
The company said it had spent the previous year strengthening its core and premium menu after building traffic through its value offerings.
Burger King launched a Korean premium range and followed it with peri-peri products in July.
"Both those promotions have been really, really good for the company and have drawn a lot of traffic through those promotions," Group Chief Executive Officer Rajeev Varman said.
The company also launched co-branded desserts and shakes during the quarter and continued to build its BK Cafe business.
The company has been using lower-priced products to increase customer visits for several years. In the March quarter, management said dine-in traffic had grown 18% over three years. Its value offerings included 2for79 and 2for99 products.
In the June quarter, Burger King India's revenue rose 23.6% from a year earlier to Rs 682 crore.
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Chicken, Cheese — And Now Noodles
Sapphire Foods has also increased the pace of product launches at KFC.
The company had said in its March-quarter call that it previously introduced three to four innovations a year and had increased the frequency of launches.
One was Dunked, in which pieces of chicken are dunked into sauce rather than having sauce added on top.
The June quarter brought the Double Chicken Dynamite.
Purohit described it during the earnings call as two chicken fillets with "a layer of noodles and cheese" between them.
The launches have come alongside KFC's existing value programme.
Sapphire had begun testing a Rs 99 Chicken Krisper meal in December after an earlier Rs 299 EPIC Saver campaign failed to generate the increase in transactions it had expected.
The Rs 99 meal initially ran in part of Sapphire's KFC network and was supported by advertising aimed at people who did not use the chain. Management said in February that it was seeing traction in dine-in and takeaway after the launch.
By the June quarter, Sapphire's KFC business reported 5% same-store sales growth. Dine-in and takeaway increased to 59% of sales from 57% a year earlier.
Sapphire said the combination of advertising and its everyday-value offering was getting new customers to consider KFC.
McDonald's Wants More Visits
Westlife Foodworld, which operates McDonald's restaurants in western and southern India, has also focused on increasing customer visits.
In the December quarter, Westlife reported a 3% decline in same-store sales. Comparable guest counts were broadly stable from a year earlier, although management said November and December had started showing flat-to-positive growth.
The company said at the time that it would wait for several months of consistent improvement before calling it a sustained recovery.
The numbers changed in the June quarter.
Westlife reported what management called its strongest topline growth, highest same-store sales growth and fastest guest-count growth in the recent past.
"Most importantly, every one of those numbers is being led by more people walking into McDonald's more often," Chief Executive Officer Akshay Jatia said.
Westlife said its everyday-value meal continued to drive dine-in visits. The company also said it was acquiring more consumers and driving repeat visits.
McDonald's has separately experimented with additions to its existing menu, including a protein slice that can be added to products.
Value Offers Remain
The new products do not mean the chains have stopped offering lower-priced meals.
Varman said Burger King's strategy had not changed and that the company would continue with its value offerings while strengthening other parts of the menu. Westlife said its everyday-value platform remained a driver of dine-in traffic. Sapphire continued to use its Rs 99 KFC meal to bring new customers into restaurants.
At the same time, the June-quarter commentaries showed that the companies introducing products alongside those offers.
Burger King has added Korean burgers and co-branded desserts and shakes, and followed them with a peri-peri range in July.
For KFC, it included Shawarma and the Double Chicken Dynamite.
And for customers ordering the latter, that means two chicken fillets, noodles and cheese - all in the same product.
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