Slowdown in urban consumption or change in preference? CLSA explains

CLSA has an 'underperform' rating on two out of the three listed QSR players.

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26 Aug, 2025 12:21

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Brokerage firm CLSA argued that while sales of quick service restaurants (QSR) and FMCG companies reflect tepid consumption patterns, young Indians are choosing to splurge in new avenues—concerts, IPL matches, and World Cup tickets. Charting the changing trend makes it clear that the spending habits of young Indians are shifting, swapping fries for front-row seats.

Events, eating out, travel, luxury and premium goods, cheap fashion, cosmetics and consumer appliances and electronics are fast emerging as the preferred spending bets for the young Indian breed, CLSA noted.

The brokerage further strengthened its argument by highlighting that ticket sales for four major upcoming concerts raked in a staggering Rs 350-400 crore, equivalent to over 40 percent of the incremental quarterly sales of listed QSR players. Concerts for stars like Dua Lipa and Bryan Adams sold out in a flash, with Diljit Dosanjh and Coldplay tickets following suit in a similar frenzy.

Not just that, tickets for IPL and World Cup matches also witnessed strong demand in the near past, further highlighting the booming demand for experiences, the firm noted. On the flip side, competition in the QSR space—especially for pizzas and burgers—remains intense, according to CLSA.

The brokerage also pointed out that despite Zomato’s data showing growth in the pizza category since February, chains like Domino’s are still losing market share. "Domino's and McDonald's have been seeing a lower share in incremental ratings compared to their local rivals," the firm said.

As a result, CLSA maintained its 'underperform' rating for Jubilant Foodworks (Domino's operator) and Westlife Foodworld (McDonald's operator), while keeping an 'outperform' call only for Restaurant Brands Asia (Tim Horton's, Burger King and Popeyes operator).