Jubilant FoodWorks, which runs the Domino's Pizza food chain in the country, has hiked pizza prices by 11 per cent since May 2011. The company recently took a 4.5-8.7 per cent price hike across its pizza range over the past week. Analysts feel that the recent price hikes are likely to reduce Jubilant’s volume growth.
Analyst had expressed a surprise at the significant price hike that the company took on products. “The company typically takes 6 per cent price hike annually,” Kotak Securities had said in a note on Jubilant Foodworks last month.
However, Ajay Kaul, CEO & Whole time Director of Jubilant FoodWorks, said that price hikes taken in the current year were unprecedented and have not impacted the demand yet. “Price elasticity of demand is not a concern for us as of now,” he said while speaking to NDTV Profit.
Kaul further said that investments in brand building have been paying off in terms of returns.
The company has opened up 33 stores in the first half of the year and additional 29 stores are set to open up shortly. “We are eyeing 27 per cent of same store sales growth in the second quarter of FY12,” he added. As of September 2011, the company had 411 stores and employed 13,539 people .
Shares of the company have declined 0.49 per cent in the last six months, while the broader market has fallen 8.80 per cent during the same time. The company’s market cap stands at Rs 5,284crore.
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