Pizza Hut on expansion spree

Yum! Restaurants International, the owner of the Pizza Hut chain worldwide, is on a massive expansion plan.

The company hopes to double the number of Pizza Hut outlets to 100 in the next eighteen months from the present figure of 50 outlets in 15 cities in India.

The expansion programme would involve an investment of over Rs 75 crore (Rs 750 million) and will make the pizza chain the fastest growing in India.

"We are very excited about the progress we have made in India. People are experimenting more and are going out to eat more. Also, in a way, pizzas have become familiar food to them, yet it is different. . . so they are trying out more of it," says , which is the parent company for Pizza Hut.

Yum! Restaurants International is among the world's largest quick-serve restaurant company. It has more than 30,000 restaurants in over100 countries and territories.

A Fortune 300 company, Yum! operates Kentucky Fried Chicken, Pizza Hut, Taco Bell, A&W and Long John Silver's restaurants worldwide. Yum! generated more than $22 billion in worldwide system sales in the year 2001.

In India, Yum! has just one outlet of KFC in Bangalore, while Pizza Hut remains its fastest growing brand, having started its first outlet in 1996.

In seven years, Pizza Hut has grown to 50 outlets throughout the major metros in India.

Though there are no specific figures as to the size of the organized pizza-retailing segment in India, the market for international fast foods is estimated to be among the quickest growing in the fast food retailing segment.

Pizza Hut, which has over 38,000 customers walk in everyday in its outlets throughout India, claims to have about 50 percent of the organized pizza-retailing segment.

"People are very familiar with pizzas now. There is no education involved in getting them to try it out. What has made this change possible is that pizza is becoming more accessible and more within the customers' reach," says Kohli.

For now though, Yum! India has no plans to bring either Taco Bell or any of the other restaurants in the group's portfolio to India.

"The focus is on Pizza Hut and we don't want to look at bringing other brands to India now. We want to grow the Pizza Hut chain as we think that the market for it is big enough to give the kind of growth we are aiming for," says Kohli.

Among the five brands under Yum! Restaurants International's umbrella, Pizza Hut has the maximum number of outlets worldwide. Pizza Hut with more than 12,500 units is the world's largest pizza chain.

KFC has around 10,286 units worldwide, followed by Taco Bell with 7,111 restaurant units world over. Long John Silver's is America's largest quick-service seafood chain with more than 1,200 units worldwide. A&W serves up its traditional root beer floats and hamburgers to customers across 1,100 outlets.

In line with its international strategy, Yum! has chosen the franchisee route to expand its outlets in India.

In India, the average investment for each outlet is at Rs 1.25-1.5 crore (Rs 12.5-15 million), which is done by the franchisee. For instance the franchisee rights for Mumbai, Bangalore, Andhra Pradesh and Gujarat are with Dodsal Corporation.

Kohli claims that most of the outlets have now attained breakeven point, which has helped spur on the company's expansion plans.

"The Pizza Hut restaurants are set up by the franchisee, while Yum looks after the quality, services, supply chain and brand management and based on the success of the outlets, we are now growing our presence in the country," he says.

For Yum! the long-term growth drivers of its business are international expansion, its unbeatable portfolio of four strong US brands, its global franchise fees and the strong cash generation and returns that the business offers.

Yum! intends to build a 'Yum Dynasty' through various customer-focused initiatives.

The five drivers, which it believes will fuel its growth in the next millennium, are: culture where everyone makes a difference, customer and sales mania, competitive brand differentiation, continuity in people and process, and consistency in result.

In India, Yum! has nearly 1,300 employees and the growth in the number of employees is expected to keep pace with the planned expansion of its outlets.

Internally, Yum! has adopted best operational practices to ensure high customer orientation, which is demonstrated through C.H.A.M.P.S. This is the umbrella operation programme for training, measuring and rewarding an employee's performance against customer standards.

C.H.A.M.P.S stands for: cleanliness, hospitality, accuracy, maintenance, product quality and speed.

"Our challenge here is to make sure we meet our quality standards in terms of food, facilities, people and the overall experience. We want to ensure that the customers experience in India is no different from a Pizza Hut outlet anywhere else in the world," says Kohli.