InvestorQ : Is it true that Jubilant Foodworks is planning to shut down over 105 stores and what is the purpose of that?
diksha shah made post

Is it true that Jubilant Foodworks is planning to shut down over 105 stores and what is the purpose of that?

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Rashi Mehra answered.
2 weeks ago
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The numbers of Jubilant Foodworks showed pressure. While the growth was visible on a sequential basis from the lows of June 2020, the pressure of growing to pre-COVID levels still remains a major challenge for these FMCG companies.

As a result, when Jubilant Food Works announced its numbers on 13 November, what really caught the eye is that the company had opted to shut down a total of 105 stores. This is the first time that the company is undertaking such a huge cut down on costs.

The 105 outlets that are going to be shut down will include 100 Domino’s Pizza outlets and another 5 outlets of Dunkin Donuts. Both these outlets of Jubilant Foodworks are extremely popular across urban India and have been hit by the pandemic and social distancing.

There is one more critical reason to shut down the number of franchises across India. The pizza franchise business, which Jubilant runs on behalf of Domino’s Pizza in India, tends to be profitable only if they are able to increase same-store sales in a big way after breakeven.

Normally, the common practice in these kinds of high velocity businesses is to shut down stores where the repeat business does not grow to the extent anticipated. COVID has put a tremendous pressure on these outlets due to high fixed costs.

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