Growth in Outlets, Not in Orders: What the QSR Slowdown Told Us

Report Findings & Clarification on Data Vintage

This piece rests on a report published on 9 January 2026 by Storyboard18, which described the second quarter of the 2025-26 financial year. That is more than a year before the date of this package, and results since then may differ. We did not find a comparable report for the first quarter of FY27, and we say so plainly. The value of the piece is in showing how to read restaurant data, not in providing a current reading.

What the report said: For Devyani International, which operates KFC and Pizza Hut in India, the report said KFC's average daily sales and same-store sales growth each fell 4.2%, with Pizza Hut showing a similar decline. The company's brand contribution fell to Rs 941 million from Rs 1,105 million a year earlier, and operating EBITDA was Rs 462 million. For Westlife FoodWorld, which operates McDonald's in western and southern India, same-store sales fell 2.8%, and chief executive Akshay Jatia was quoted as saying the company had faced "negative same-store sales growth" over the past two years. Ravi Swarup of Bain & Company was quoted as saying that same-store sales growth had softened across the industry over the previous five to six quarters. The report did not cover Jubilant FoodWorks (Domino's), Burger King or Restaurant Brands Asia, so we say nothing about them.

Why Same-Store Sales Matter & Industry M&A

Why same-store sales matter: Same-store sales growth compares sales in outlets that were open in both periods. It strips out the effect of new stores. A chain can grow revenue by opening outlets while each existing outlet sells less. When same-store sales fall for several quarters, the chain is adding stores into a market where each store's customers are shrinking or spending less. The report's description of five to six quarters of softening suggests this was a persistent pattern, not a quarter's blip.

Industry consolidation: The same report described a merger between Devyani and Sapphire Foods that would create a platform with KFC, Pizza Hut, Costa Coffee, Vaango and Taco Bell, with over 3,000 outlets and about Rs 8,000 crore in annualised revenue. It also listed deals including Devyani's April 2025 purchase of an 80.7% stake in Sky Gate Hospitality (Biryani by Kilo) for Rs 431 crore, Haldiram's talks with Inspire Brands to bring Jimmy John's to India, ChrysCapital's purchase of an 85% stake in Theobroma, and a Rs 75 crore raise by Wow! Momo from Madhusudan Kela. We report these as stated in the article, and some may have changed since.

“A chain can grow its revenue by opening stores while every store sells less.”

Market Projections vs Worked Store Arithmetic

Market size: Jajabor Brand Consultancy projected India's quick-service market at about US$30.4 billion by 2026, growing at a near double-digit pace. A projection from one consultancy is an estimate, and double-digit growth in market size is not inconsistent with falling same-store sales if new outlets and new categories are driving the growth.

A worked example (invented numbers, ours): An invented chain has 100 outlets, each selling Rs 1 crore a year, so total sales are Rs 100 crore. Next year it opens 20 outlets, and each of the original 100 sells Rs 96 lakh, a fall of 4%. The 20 new outlets, selling Rs 80 lakh each in their first year, add Rs 16 crore. Total sales are Rs 96 crore plus Rs 16 crore, or Rs 112 crore, up 12%. The chain reports double-digit growth, while same-store sales fell 4%. The example does not describe any real chain. It shows how both statements can be true.

How to Read Restaurant Performance Metrics

How to read restaurant data: our guide: 1. Look at same-store sales, not total sales. 2. Separate traffic from ticket size. Fewer orders and higher prices produce different problems. 3. Check the date. Restaurant demand is cyclical and seasonal. 4. Watch cost lines. Rent, wages and ingredients squeeze margins when sales per store fall. 5. Look at consolidation. Mergers can reduce cost but also reflect weakness.

Implications for Independents, Landlords & Limitations

What it means for independent restaurateurs: Your equivalent of same-store sales is your sales on the same days of the week against last year. Track it. If your covers are falling while your prices rise, you may be losing customers who are not showing up in the revenue line.

What it means for landlords and mall operators: Rent that assumed rising store sales is harder for chains to pay when sales per store fall. Percentage-of-sales rent clauses share the risk.

What we do not know: We do not know the current same-store sales of any of these chains. We have not verified the numbers in the report.