Fast Food Chains at Railway Stations: Haldiram, WoW Momos, and Other Snack Giants Anticipate Strong ROI and Growth
Leading fast-food chains are eyeing opportunities to set up outlets at Indian railway stations, a move that could transform the dining experience for travelers. Following a recent government announcement, established brands like McDonald’s, KFC, and Haldiram’s are seeking clarity on regulations for opening premium food and beverage outlets. The first of these outlets is expected to launch by 2026, with the potential for railway stations to surpass airport sales, according to industry experts.
New Opportunities for Fast-Food Chains
The Indian Railways has opened the door for renowned restaurant brands to establish their presence at over 7,000 railway stations across the country. This initiative stems from an amendment to the Catering Policy 2017, which now allows premium brand outlets to operate in railway stations. The government plans to allocate five-year licenses through e-auctions, enabling brands to set up either company-owned or franchise stores. A senior railway official emphasized the goal of enhancing the passenger experience at railway stations to match that of airports, indicating a significant shift in how food services are perceived in transit environments.
Potential for Strong Returns on Investment
Industry leaders believe that while airports may yield higher average order values, railway stations present a unique opportunity due to their scale. Sagar Daryani, president of the National Restaurants Association of India, highlighted that with the right operational model, railway outlets could generate substantial returns on investment. Factors such as volume-led sales and quicker turnaround times could contribute to this potential. The railway official noted that premium outlets must maintain high standards of food quality and service, alongside paying a fixed license fee for occupying space at the stations.
Market Demand and Growth Prospects
A recent study by retail group IRHPL revealed that beverages dominate food and beverage sales at airports, accounting for about 70% of revenue. Executives from various food chains anticipate similar demand patterns at railway stations. A spokesperson for Haldiram’s expressed optimism about the new policy, stating it unlocks significant potential for the industry. They are currently collaborating with the government to finalize details, believing that if executed properly, this initiative could become a major opportunity for quick-service restaurants (QSRs) catering to a diverse demographic of train travelers.
Boosting Non-Fare Revenue for Indian Railways
The introduction of premium food outlets is expected to bolster Indian Railways’ efforts to increase its non-fare revenue, which currently accounts for only about 3% of its total income. A report by Niti Aayog has pointed out the vast untapped potential in this area, noting that non-fare revenue constitutes around 30% of railway income in developed nations. In the fiscal year 2024, Indian Railways reported non-fare revenue of Rs 588.07 crore, which rose to Rs 686.9 crore in FY25. This growth indicates a promising future for the railway sector as it embraces new revenue streams through enhanced food services.
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