PVR Inox Plans to Open 8-10 Food Courts by FY26, with First Opening Scheduled for Dec

PVR Inox, India's biggest multiplex chain, will open its first food court in December as part of a joint venture with Devyani International, which manages culinary brands such as KFC and Pizza Hut.

"During the current quarter, a company namely 'Devvani PVR Inox Private Limited' has been incorporated on July 26, 2024, inter alia to undertake the business relating to development and operation of food courts situated within shopping malls in India," PVR Inox disclosed in its financial statement for Q2 of for fiscal year 2025.

Chief financial officer Gaurav Sharma stated that the company intends to open three to four food courts this fiscal year and eight to ten more the following fiscal year. "Today, all of our F&B revenue comes from post-ticketed business, which means that when a customer enters the theater after purchasing a ticket, there is F&B revenue. So, we want to get out of the cinema and attend events outside of the cinema industry. And that was our strategic aim in forming a joint venture with Devyani, which has brands such as Pizza Hut, KFC, and Costa Coffee."

There are no branded food courts in the country, and their goal is to provide visitors with a brand food court experience, he explained. Sharma also stated that in-cinema food and beverage earnings will be distinct from the food court business. "The idea of doing this business was to take F&B beyond cinema."

From releasing its gourmet popcorn brand 4700 BC on online platforms to collaborating with Zomato for in-cinema food delivery, PVR Inox has been experimenting with various tactics to grow its F&B business. Sharma stated that they are in talks with more online meal delivery companies, such as Swiggy, to increase online F&B revenues.

"In the second quarter of FY25, F&B accounts for 32% of total sales. So, food and beverage accounts for one-third of our business, and this category has enormous growth potential. The average spending per person is at Rs 136, compared to Rs 250 spent on ticket fees, representing around 50% of spending. When we compare to some of our worldwide colleagues, it is 75 percent of ticket spending. As Indians' discretionary income rises, there is a big opportunity for growth. We anticipate that customers would spend more on food and beverage, and that this segment's percentage of total revenue will increase," Sharma stated.

In FY24, PVR Inox's F&B revenue climbed to Rs 1,958.4 crore from Rs 1,618 crore the previous year. In July-September, the company's F&B sales was Rs 523 crore, up 30% sequentially but down 18% year on year. Co-CEO Gautam Dutta stated that in order to build the F&B sector, they must focus heavily on online food sales.

"When we engage with players like Zomato, we understand that cinemas are on the third floor, therefore our deliveries are sometimes delayed. The walkers (delivery men) need to get to the third floor. In the South, we're doing a lot of business with home delivery since a lot of cinemas send the food down to the box office, where it's extremely easy to collect," he explained. "But altogether, I believe we still need to properly crack this paradigm and possibly create up dark kitchens under the moniker PVR Cafe. Delivering from the movie will always result in an incremental food sale, but only in a restricted amount. So, we need to radically rethink the delivery approach," Dutta said.

PVR Inox has less than one percent of its sales coming from online food delivery. "While meal delivery accounts for a minor fraction of our F&B business, we are investigating additional partnerships with other players such as Swiggy. Outdoor catering is a local idea that we are implementing in collaboration with Navratri booths and Weekender. So we're trying to accomplish as much as we can outside of the four walls of the cinema," Sharma explained.

As the company considers new formats to increase its F&B revenue, the multiplex chain outperformed several quick service restaurants in FY24, with a F&B business of about Rs2,000 crore. In FY23, PVR Inox was the fifth-largest food firm, with a F&B sales of Rs 1,525 crore, ahead of Restaurant Brands Asia, which had Rs1,343 crore.