How Zomato and Swiggy steal the show from Devyani, Sapphire Foods

The dominance of major quick-service restaurant (QSR) chains is facing a challenge as Zomato and Swiggy reshape the food market. While valuations remain high, the stock performance of companies like Westlife and Jubilant have declined. These food delivery apps are empowering local restaurants, which is squeezing profit margins for the big players and slowing their growth to single digits. The scale of a QSR brand no longer guarantees market power, raising the question of who truly controls the customer relationship in this evolving landscape.

Peter Lynch, the well-known fund manager from Fidelity, had a straightforward method for evaluating consumer stocks. He would visit the Burlington Mall in his hometown of Marblehead, Massachusetts, believing that if he liked the store, he would likely favor the stock. That said, the reality is a bit more complicated. this approach hasn't proven as reliable for Indian investors in the restaurant sector, where simply being a large QSR brand was once considered sufficient for success.