India's quick service restaurant (QSR) sector is witnessing a significant shift in consumer behavior as value-conscious customers increasingly prioritize affordability over brand loyalty. According to recent market analysis, major restaurant chains experienced muted growth during the second quarter of fiscal year 2026, with value deals emerging as the primary driver of customer traffic.
Market Performance Highlights
The QSR industry's Q2 FY26 results reveal a challenging landscape where consumers are actively seeking budget-friendly options. Restaurant Brands Asia, which operates Burger King in India, reported same-store sales growth (SSSG) of just 1% year-on-year, significantly lower than the 31% growth recorded in the same period last year. This dramatic slowdown highlights the changing spending patterns among Indian consumers.
Similarly, Jubilant FoodWorks, the operator of Domino's Pizza in India, posted a modest 2.4% year-on-year growth in like-for-like sales. The company's management noted that consumer sentiment remained cautious, with customers showing increased preference for value offerings and combo deals rather than premium menu items.
Value Deals Driving Footfalls
Industry analysts observe that value deals have become the cornerstone of QSR strategies to maintain customer engagement. Westlife Foodworld, which operates McDonald's in western and southern India, reported a 5% year-on-year increase in same-store sales, outperforming competitors by focusing aggressively on value propositions and affordability.
The trend is clear: consumers are responding positively to budget-friendly meal options. Quick service restaurants that have introduced attractive value meals and combo offers are seeing better footfall compared to those maintaining premium pricing strategies. This shift indicates that Indian consumers are becoming more price-sensitive amid economic pressures and inflationary concerns.
Consumer Spending Patterns Evolve
Market experts attribute this behavioral shift to multiple factors, including economic uncertainty and changing disposable income patterns. Devansh B. Jayswal, Equity Research Analyst at Emkay Global Financial Services, emphasized that value offerings are crucial for maintaining market share in the current environment. The analysis suggests that consumers are not necessarily dining out less frequently, but are becoming more strategic about their spending when they do.
The data reveals that QSR chains offering meal combos priced between ₹99 and ₹199 are experiencing higher traction compared to premium offerings. This price sensitivity is particularly evident among younger consumers and families, who constitute a significant portion of QSR customers in India.
Future Outlook and Strategic Shifts
Looking ahead, industry players are expected to recalibrate their strategies to align with evolving consumer preferences. Most QSR chains are likely to strengthen their value proposition through affordable meal combinations and limited-time offers to drive customer acquisition and retention.
The muted Q2 performance serves as a wake-up call for the industry, indicating that success in the Indian QSR market will increasingly depend on understanding and catering to price-sensitive consumers. Companies that can balance quality with affordability while maintaining operational efficiency are positioned to navigate the current challenges successfully.
As the festive season approaches, QSR chains are expected to launch aggressive promotional campaigns and value deals to capitalize on increased consumer spending. However, the fundamental shift toward value consciousness appears to be more than a temporary trend, suggesting lasting changes in how Indian consumers approach dining out decisions.
