(This story originally appeared in on Sep 12, 2016)

UNIMPRESSIVE SALES

‘INNOVATION CRUCIAL’

NEW DELHI: Domino’s Pizza will turn half of its outlets all-vegetarian during the auspicious nine-day Navratri festive period starting early next month in an unprecedented move to draw more customers as the Indian unit of the US pizza giant seeks to recover from its slowest same-store sales growth in almost two years.Starting October 1for nine days, about 500 Domino’s stores across north and central India and parts of the west will stop serving non-vegetarian food, the first time a western-style quick service restaurant (QSR) is converting to a Navratri menu on such a large scale. Food outlets and QSRs typically see dwindling sales during the Navratri period, which ends 21 days before Diwali.In the past, too, Domino’s has served vegetarian food during this festive period, but only at select stores and not for delivery orders. “Consumption of non-vegetarian food reduces significantly during this time. This move is an acknowledgement that though we are a global brand, we are conscious about consumer needs. It’s about making a statement to consumers,” Domino’s Pizza India President Dev Amritesh said.With many people abstaining from meat, wheat, garlic, onions and processed foods, the Navratri menu will include pizza bases made of singhara atta (water chestnut flour), saabudana crispies and dumplings and cheese and sauces with only rock salt. The pizza chain will not use garlic and onion and will do away with grains that aren’t consumed during the period.“Pizza being a very versatile product, we have been able to create this menu,” Amritesh said. Turning all-vegetarian for such a large number of stores was a huge initiative involving logistical challenges and aligning with suppliers, he said.With 1,062 restaurants in 248 cities, Domino’s leads the organised pizza market with a more than 70% share.By turning vegetarian, Domino’s is hoping to attract more orders and boost sales growth, which had been slowing with consumers cutting back on discretionary spending. For the April-June quarter, Jubilant FoodWorks Ltd., which is the exclusive India franchisee for Domino’s and US doughnut chain Dunkin’ Donuts, announced a 3.2% year-on-year drop in same-store sales growth (SSG).“This is the lowest SSG in past seven quarters due to muted consumer sentiment, delay in launch of new products, shift in Ramadan (fasting) days and competitive intensity by online players,” financial services firm Edelweiss Securities wrote in a report on September 3, adding that higher costs have exerted pressure on margins.“In the medium term, industry is expected to go through a rough patch.” Jubilant FoodWorks’ operating profit was down 14%, while net profit declined 31% to Rs 19 crore in the June quarter.“The quick service restaurant (QSR) space is highly competitive, which is why the need for innovation is crucial for continued success. Amidst intense competition, the slightest difference can have a lasting impact,” the National Restaurant Association of India (NRAI) said in its Indian Food Services Report for 2016. The association said the top five companies, including Domino’s, McDonald’s KFC and Subway , dominate the QSR sector, and Domino’s leads with a 30% share.Jubilant FoodWorks has accelerated promotions such as ‘buy one, get one free’ across the week. The company added 23 restaurants in the April-June quarter, slowing from 35 new outlets a year earlier, and retained a target of setting up 130-140 stores in this financial year.