​It’s raining ‘Happy Hours’ across QSR chains

The Quick Service Restaurants or QSRs are undergoing ‘the struggle for existence’ in the Indian market. Blame it on the buying psyche or cut-throat competition, the chains are jostling against each other to win customer’s preferences. Going an extra mile to woo its customer, Starbucks, world’s largest coffee chain managed by the Tata group in India has started offering big discounts to attract more customers. As per a news report by The Economic Times, anyone buying before 4 pm will get a voucher for 40% off the bill when she next visits a Starbucks in Mumbai, Chennai, Delhi NCR, Pune, Hyderabad or Bengaluru after 6 pm. An additional 10% discount is being offered to those who have a Starbucks loyalty card.

“We are constantly trying to innovate and create interesting offers for our customers," marketing and category director Manmeet Vohra told the Economic Times. "This 'treat receipt' is a concept that has been conceptualised from this thought." Starbucks is not the only cafe chain that's discounting to win customers.

Experts told the financial daily, this is happening because of competing claims for the consumer wallet, not just in terms of brands but the rapidly increasing adoption of eCommerce. It's not just coffee shops that are offering discounts to drum up business-the quick service restaurant or QSR segment is pushing hard on promotions.

Domino's has a 'buy one, get one free' offer on pizzas every Friday, while Pizza Hut has a similar one for Wednesdays. McDonald's offers cash back of up to Rs 50, which customers can avail of on mobile recharge site Freecharge.

"The QSR and cafe industry is getting into a circular firing-squad formation, trying to kill each other to grab market share, as if this is the only way to grow in an early-stage growth market," Jaspal Singh Sabharwal, partner at Everstone Capital, local master franchisee for Burger King told the ET.

He attributed this to a variety of factors such as sluggish demand, massive pressure to expand and the emergence of the millennials, also known as Gen Y and referring broadly to those born in the 1980-2000 periods or thereabouts.

Rivals cafe chains also offer discounts but these have typically been restricted to either one day a week, specific menu items or are in the range of 20-30%. Costa Coffee ran a limited Happy Hours promotion two years ago to boost custom during non-peak hours (after 8 pm).


Sabharwal of Everstone said patience would pay good dividends. "Most global brands are backed by strong balance sheets and usually have a longer term view of the Indian market but this time it is different - they are all in a hurry. Mom and pop restaurants and responsible QSR Chains would suffer in the beginning but the future belongs to them as they prepared to build communities of customers around them. It is already happening in the developed world and India won't be an exception," he said.

(Image: Reuters)