It's clear that the market for quick service restaurants (QSRs) is already experiencing weak demand. It is also anticipated that the quick growth of meal delivery services like Zomato and Swiggy would be more detrimental.

The average number of active restaurant partners on Zomato increased dramatically from 61,000 in FY19 to 270,000 in FY24, outpacing the 5,300 locations of listed quick service restaurant (QSR) brands during that time. According to the BNP Paribas QSR research, Swiggy will have 272,000 operational eateries by the end of FY23, demonstrating the quick development of food delivery services.

It stated that although this growth gives customers more alternatives, it is fragmenting sales and weakening the QSR industry's already low daily sales numbers due to a general slowdown in demand.

The number of delivery partners has skyrocketed, greatly expanding the pool of potential customers, especially for smaller eateries. As a result, Zomato's restaurant base has increased from 22 times in FY19 to 51 times the total number of branded QSR outlets.

According to BNP Paribas analysts, the softening demand in the March quarter meant that QSR players will have another poor quarter. Businesses noted a difficult macro environment marked by low consumer expenditure and inflation. After the elections, management anticipates that this negative consumer mood will subside. They expect the first quarter, which is usually stronger than the fourth, to rise sequentially.

QSR firms have not modified their capital expenditure (capex) projections or store expansion plans in response to the dampened demand and poor same-store sales growth (SSSG) or like-for-like (LFL) growth, the research continued.

With a Rs 2.5 billion investment, Jubilant FoodWorks opened its largest food processing facility, Jubilant Food Park, in Bengaluru during the third quarter. The building will house about 300 Popeyes and Hong's Kitchen locations in addition to 750 Domino's locations. Jubilant aims to establish 180 Domino's, 50 Popeyes, and 25 Hong's Kitchen locations in India in addition to the 179 outlets it launched in FY24.

In a similar vein, Devyani International intends to open 275–300 net new stores in FY25, comprising 60–70 Costa Coffee, 70–80 Pizza Hut, and 120–130 KFC locations. Burger King's operator, Restaurant Brands Asia, plans to add between 70 and 80 new locations in FY25, with a goal of having 700 locations overall by December 2027. Zomato was down 0.33 percent from the previous closing at 9.47 am on the National Stock Exchange, trading at Rs 183.05.