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Over 50 pc store growth for western QSRs in India by 2025: Report

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India’s organised food services market may grow at about 10.5 per cent CAGR to $37 billion over FY2025, says a new report from Kotak Institutional Equities.

“We expect India’s organised food services market to grow at about 10.5 per cent CAGR to $37 billion over FY2020-25E, garnering 46 per cent market share from 40 per cent at present,” the report said.

Within the organised segment, chains can potentially grow at 13 per cent CAGR to $9.5 billion, capturing 12 per cent share in the overall food services market from 9 per cent at present, it added.

“Our bottom-up analysis of the market opportunity for western QSRs across 541 districts in India indicates potential for over 50 per cent store growth by FY2025E,” it said.

As per Kotak’s city-wise forecast, factors include purchasing power, addressable population, palate preferences, extant QSR penetration, cluster-based expansion and economic viability. Even as western QSRs are widely accepted in India, their penetration and share of the food services market at 3-4 per cent is much lower than in developed markets (over 15-20 per cent), the report noted.