Pizza Hut to outsource delivery riders

India: Yum Restaurants-owned Pizza Hut, which operates over 350 stores in the country, has outsourced its delivery riders to a third party company in order to reduce the company’s fixed costs. The restaurant chain will no longer deliver pizzas through its own employees, starting with top 5 cities including Delhi NCR.  For the April-June '16 quarter, Yum reported a decline of 7 per cent year-on-year same store sales. Yum resultants, which owns Pizza Hut, KFC and Taco Bell has, verticalised its operations and integrated all three India brands with their global divisions.

According to TechSci Research, the company’s initiative to outsource its delivery riders is set to reduce its operational expenses which would help the company to avoid its increasing working capital cost. This would ultimately help the company to increase its revenue.

 According to a recently published report by TechSci Research, “India Food Services Market Forecast & Opportunities, 2020”, the market for food services in India is expected to grow at a CAGR of over 12% through 2020. Growth in the market is anticipated primarily on account of higher disposable income, improved standard of living and changing preferences of consumers. In addition, expansion of brands into tier II and tier III cities, is also a major factor which is expected to drive growth in food services market of the country over the next five years. In 2013, the market was dominated by unorganized and non-branded players, however, with growth of various foreign and domestic brands, these players are expected to lose their market to organized branded players. Segment-wise, dining food services segment was the largest contributor in India food services market in 2014, on account of the large number of dining restaurants in the country. The segment is expected to retain its dominance in the market over the forecast period as well.