Pizza Hut Pakistan enters into expansion mode

Creates a more collaborative franchise model by opening up ownership for local investors


Shahram Haq December 17, 2017
Pizza Hut at Jinnah Market. PHOTO: WIKIMEDIA COMMONS

LAHORE: The love of Pakistani inhabitants for food is creating opportunities for many enterprises. Be it desi, Chinese, Thai or Japanese cuisine, people definitely give it a try at least once. However, the biggest success among all these is the fast-food industry.

The fast-food sector has witnessed the entry of many globally renowned and domestic brands in recent years. For some such as Pizza Hut, the country’s first foreign food brand, there is still plenty of room to cover.

Pizza Hut is believed to be the pizza pioneer in Pakistan which at that time was not as popular in the country as it is today. MCR Pakistan, the prime franchise of Pizza Hut in Pakistan, took the initiative in 1993 and enjoyed a monopoly in selling pizzas for many years.

However, once pizzas became a staple diet of fast-food eaters, especially the younger generation, the company started losing its grip as a plenty of domestic, low-cost pizza eateries opened throughout the country.

Pizza Hut Pakistan Chief Marketing and Innovation Officer Hameed Kashan believes that despite a greater range and variety of choices nowadays, pizza still remains a favourite food for Pakistanis.

“Pakistan is the only country witnessing a massive growth in popularity of pizzas compared to other countries,” Kashan told The Express Tribune.

“In coming years, we expect the market to further increase as Pakistan’s overall economic growth and disposable income has shown positive trends in recent years.”

From its inception in 1993 till December 2017, the brand has delivered over 100 million pizzas in Pakistan and the management last year altered its franchise policy by opening up the brand name to local investors as a strategic shift to cover more marketplaces both in first and second-tier cities.

“We realised that we are not growing at the desired pace so we decided to add local partners as we predicted sales to increase by 30% if the franchises are operated by individual investors rather than through a central system,” Kashan said.

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Involving individual investors means that the management will factor in the suggestions of upcoming franchisers to run the business more efficiently and to compete with local brands which are snatching a great chunk of business from Pizza Hut.

The management will also work to introduce new local flavours to ensure additional varieties both for high and low-end customers.

“Adding local flavour is the key to success for this business,” Kashan said, highlighting Chicken Tikka, which has been adopted by franchises in other countries as well, as the prime example.

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To date, the company has 80 branches in 20 cities and is aiming to double this figure in the next five years, but this time with a collaborative business model since the product no more remains an exclusive food.

It employs nearly 4,500 people with the figure expected to double in the next five years as well.

Kashan said selling pizzas is still a profitable business with the growth never showing a bearish trend, even with the brand observing a shift in clientele from high to middle classes.

“Pizza Hut Pakistan’s year-on-year growth has remained in double digits throughout its journey and we are hopeful of the same trend continuing in the years to come,” he said, while avoiding giving exact revenue figures.

But as the expansion drive triggers, the management has to take care of the quality of its products, Kashan conceded. “Maintaining the quality, providing a consistent taste of our products in franchises across the country and adding local flavours in our pizzas remains a challenge for us,” he added.

 

Published in The Express Tribune, December 17th, 2017.

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