Following the decline of the popularity of pizza in India and a decline of 7% year on year same store sales, the Yum Restaurants’ owned Pizza Hut in India has outsourced its delivery riders.
Riders delivering Pizza Hut fare will now be from a third party. The outsourcing indicates that Pizza Hut is looking to reduce costs – an industry expert commented to the Economic Times “typically, along with costs of riders, data centre and call center expenses would work out to over a monthly Rs 6-8 lakh. Across a bigger footprint, these expenses add up significantly. Costs can be pruned with third party outsourcing.”
Reportedly, the outsourcing will begin in five cities where the chain has its largest presence, including Delhi.
The Decline of The Pizza
In the larger scheme of things, the profit margin in the pizza delivery industry has narrowed since 2011.
Consumers are looking for healthier meal options and are choosing local eateries and brands over international fast food chains. All these factors work together to contribute to the pressure on pizza brands; read more about the scenario here.