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Food aggregators aren't restaurants' enemies: Merrill Pereyra, MD Pizza Hut India

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The Economic Times
15th January, 2020 07:08 IST

NEW DELHI: Restaurants should stop treating aggregators as their “enemies” and instead look for solutions to work together, says Pizza Hut India managing director Merrill Pereyra.

“You can’t compete with the aggregators; they have big dollars behind them, you have to treat them as partners and be strategic about how you work with them,” Pereyra told ET in his first interview after taking over the top job in India four months back. “When someone has got huge funding, you’ve got to be careful in saying don’t come near me; you can’t say you won’t do business with them.”

Many restaurants have been at loggerheads with popular aggregators such as Zomato, Swiggy and Uber Eats since August last year with the restaurants accusing aggregators of resorting to deep discounting, data masking and charging uneven commissions. “You have to have proper agreements with them (the aggregators); we are in process of closing most of the issues,” Pereyra said. Online sales account for 35% of Pizza Hut India’s business and the share is growing, he said.

“It’s amazing how much Indian consumers are dependent on convenience now,” said the Mumbai-born executive who has returned to India after 30 years. Top players Zomato and Swiggy are estimated to be delivering 1.25 million to 1.60 million food orders across the country every day.

Pereyra, who has come from global franchise chain QSR Brands in Malaysia, is the first outsider head of Pizza Hut India. All his predecessors have been elevations from within Yum! Brands that operates Pizza Hut, KFC and Taco Bell restaurant chains in the country.

Pizza Hut plans to set up 100 new stores in the country this year after a flat 2019 on account of multiple challenges including slowing consumption, Pereyra said. Last year, it had opened only 35 new stores.

For the last reported third quarter ended September 30, 2019, Pizza Hut India had reported systems sales growth of only 2%. It said system sales grew to 8.1% in the fourth quarter, though these numbers have not been reported yet.

India contributes 1% to Kentucky-based Yum! Brands’ global sales. “We are hoping to build our business by 5-7% this year. The potential of organised western style eating out is huge in India,” Pereyra said.

There are 460 Pizza Hut outlets in India and dine in accounts for more than half its revenues. While its store operations are split more or less evenly between franchisees RJ Corp-owned Devyani International and Sapphire Foods, Pizza Hut India manages marketing, operations, strategy and supply chain. The firm is expanding touch points, upgrading delivery and apps and working on sustainable growth, Pereyra said.

“There will be cross-advertising with them because they are aggressive on deals and have a huge customer base; they have 25-30% of data — that’s how we will grow the delivery business which is accelerating so rapidly.”

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