On Monday, Barbeque-Nation Hospitality announced its second consecutive quarterly loss, primarily attributed to declining demand and increasing expenses.
The restaurant chain recorded a consolidated net loss of 123.7 million rupees ($1.5 million) for the three-month period concluding on September 30, marking a contrast from the 43.1 million rupees loss reported in the previous quarter.
In the same period last year, the company had reported a profit of 70.9 million rupees.
Indian food companies are grappling with reduced customer traffic due to elevated inflation, which is prompting consumers to limit their discretionary expenses.
For the majority of the reporting quarter, India’s retail inflation stayed above the Reserve Bank of India’s tolerance range of 2%-6%, only easing to 5.02% in September.
In response to this, Barbeque-Nation introduced promotional deals such as “early bird sales” on both beverages and food in an effort to boost sales.
In a statement, the company noted that it experienced a “seasonally sluggish quarter affected by days when only vegetarian options were available.”
The key performance metric, same-store sales, experienced a year-on-year decline of 10.7%, while the total revenue dropped by 2.8%. During this period, the company both opened four new stores and shuttered four others.
The company stated its intention to explore cost optimization strategies to enhance same-store sales growth in the latter half of the fiscal year.
Barbeque-Nation’s expenditures increased by 2%, primarily due to higher employee benefit expenses and occupancy costs, which more than offset a 2.5% reduction in the cost of food and beverages.
Following the release of the results, Barbeque Nation’s shares dipped by 2.5% to 631.9 rupees, accompanied by a trading volume 1.7 times higher than its 30-day average.
Westlife Foodworld and Sapphire Foods India witnessed declines in profits previously, whereas Jubilant FoodWorks, the franchisee of Dominos Pizza, surpassed Q2 profit estimates due to increased demand driven by cheaper pizzas.