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India’s Quick Service Restaurant war seems to be never ending. At a point when saturation point in burger has been reached, thanks to <keyword id="33542" type="COMPANY" weightage="20" keywordseo="Burger-King">Burger King</keyword>, McDonalds and <keyword id="6376241" type="CITY" weightage="20" keywordseo="KFC">KFC</keyword>, a new <keyword id="491" type="POSITION" weightage="20" keywordseo="player">player</keyword>, <keyword id="349155" type="COMPANY" weightage="20" keywordseo="Wendy">Wendy</keyword>’s has joined the race. World’s third largest burger chain boasts in the fact that they won’t reduce the price compromising with the quality. A time when the price war has triggered a tough competition making McD and KFC to sell burgers at Rs 25-35 onwards, Wendy has earmarked the burgers above Rs 59. 
 As per a news report by The Economic Times, its starting menu has 11 vegetarian and 10 non-vegetarian products with burger prices going up to about Rs 200 apiece. <keyword id="1646510" type="PERSON" weightage="20" keywordseo="Jaspal-Singh-Sabharwal">Jaspal Singh Sabharwal</keyword>, MD at <keyword id="34499" type="POSITION" weightage="20" keywordseo="private-equity">private equity</keyword> firm <keyword id="260134" type="COMPANY" weightage="20" keywordseo="Everstone-Capital">Everstone Capital</keyword> that partners Burger King in India, agreed it is not easy to do a quality product at less than Rs 30. Talking to the ET, Wendy's <keyword id="194612" type="POSITION" weightage="20" keywordseo="global-president">global president</keyword> <keyword id="2838732" type="UNKNOWN" weightage="20" keywordseo="Darrell-van-Ligten">Darrell van Ligten</keyword> said, “"We are starting at Rs 59 because we believe that's where quality comes in.” 
 
"It is a strategic call that the brands take. You can play the sub-Rs 30 game by re-engineering the product build and certain consumers don't mind it because they understand the price-value equation very well. For brands, this means lower per unit profits but much higher penny profits driven by huge traffic and an added opportunity to up-sell other items like fries and beverages," Sabharwal told the ET. 
 
 According to Sabharwal, the price elasticity at lower price points is huge in India. "You can sell more than 700 burgers a day at Rs 27 per unit but this drops to 250 if you increase price to Rs 35 per unit," he says. Prices at Burger King start atRs 35, McDonald's sells burgers upwards of Rs 27, and KFC sells burgers starting at Rs 29. Wendy's Ligten admitted that the firm had lost the first mover advantage in India, but hinted that coming in late has its advantage. "Thanks to them (McDonald's and KFC), we don't have to educate Indian consumers about western QSRs (quick service restaurants)," said Ligten, a former employee at Yum! that owns KFC and <keyword id="58553" type="COMPANY" weightage="20" keywordseo="Pizza-Hut">Pizza Hut</keyword> chains. 
 The Et report reads, officials at Wendy's, however, feel there are enough consumers for 'quality' products. "People are eating less pizzas and burgers here despite low prices because of the quality of the food," said Jasper Reid, head of <keyword id="748111" type="COMPANY" weightage="20" keywordseo="Sierra-Nevada">Sierra Nevada</keyword> Restaurants, exclusive franchise partner to Wendy's in India. "New Delhi is no different from <keyword id="6355838" type="COMPANY" weightage="20" keywordseo="New-York">New York</keyword>. Consumers are the same everywhere. There's a flight towards quality," he added. Sierra Nevada is a joint JV between UK firm <keyword id="2838478" type="UNKNOWN" weightage="20" keywordseo="International-Market-Management">International Market Management</keyword> and domestic firm <keyword id="2493023" type="UNKNOWN" weightage="20" keywordseo="Rolltainers">Rolltainers</keyword>. <keyword id="1694775" type="UNKNOWN" weightage="20" keywordseo="Sanjay-Chhabra">Sanjay Chhabra</keyword>, <keyword id="2839097" type="UNKNOWN" weightage="20" keywordseo="director-at-Sierra">director at Sierra</keyword> Nevada, said it plans to set up 8-10 Wendy's restaurants every year over the next five years or so. 
 
(Image: Hufffington POst)

Wendy’s is taking McDonalds
head-on in the Indian market

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, <keyword id="6377922" type="CITY" weightage="20" keywordseo="Starbucks">Starbucks</keyword>, world’s largest coffee chain managed by the <keyword id="6355725" type="CITY" weightage="20" keywordseo="Tata-Group">Tata group</keyword> 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 <keyword id="6354321" type="CITY" weightage="20" keywordseo="Bengaluru">Bengaluru</keyword> 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 <keyword id="33542" type="COMPANY" weightage="20" keywordseo="Burger-King">Burger King</keyword> 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)

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Wendy’s is taking McDonalds head-on in the Indian market

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It’s raining ‘Happy Hours’ across QSR chains