Burger King in India has reported a larger loss in the first quarter due to increased expenses

Restaurant Brands Asia reported a more substantial loss in the first quarter, attributed to increased raw material expenses and significant investments in expanding its Burger King outlets in India. According to an official filing with the exchange, the restaurant chain's consolidated net loss grew to Rs 50.48 crore ($6.1 million) for the quarter ending on June 30, compared to Rs 47.5 crore recorded a year ago.

The surge in total expenses, amounting to a 21% rise reaching Rs 672 crore, was primarily driven by a 26% increase in the cost of materials consumed. This escalation was influenced by the elevated costs of essential ingredients, including cheese and vegetables. These cost pressures have similarly impacted competitors such as KFC franchisees Sapphire Foods India and Devyani International, as well as Domino's Pizza operator Jubilant FoodWorks.

In response to this challenging landscape, earlier this year, Restaurant Brands Asia unveiled new meal offerings starting at Rs 99 ($1.20). This strategic move aligns with the broader trend of global chains in India embracing more affordable options to attract customers adjusting their spending habits due to heightened inflation.

The company's revenue from operations exhibited a positive trajectory, surging by 25% to Rs 611 crore. This growth was underpinned by the successful introduction of the new meal options and the strategic expansion of their restaurant footprint in India and Indonesia, where the company holds master franchisee rights. Over the past year, Restaurant Brands Asia has opened numerous new restaurants in these markets.

As a result of the company's performance, shares of Restaurant Brands Asia saw an almost 2% increase, with a nearly 20% rise for the June quarter, including its operation of Popeyes stores in Indonesia under the umbrella of Restaurant Brands International.