Westlife Development Ltd, which operates McDonald’s restaurants in western and southern India through its subsidiary Hardcastle Restaurants Pvt Ltd, said it would add another 30 to 40 stores in the current financial year.
The company has a larger goal of adding 200 restaurants in the next 3-4 years. The company typically adds about 25 new restaurants per year.
“We plan to add between 30 and 40 outlets this fiscal year. The share of the western fast food segment in the food service category has increased and this is helping us to add new stores. Brand relevance also contributes to the profitable expansion of our stores,” said Amit Jatia, Vice President, Westlife Development Ltd.
It currently operates 326 restaurants and 262 McCafes in 47 cities. So far, 118 McDonald’s outlets have been renovated in line with the digital “Experience of the Future” concept.
Fourth quarter results
Regarding its fourth-quarter earnings, the company said that after the third pandemic wave, it had seen a “full recovery in restaurant business.” It also reported “comparable store sales (SSSG) growth of 23% in the March quarter.”
Consumers came back in force for catering services, while local channels continued to perform well. “Along with this, adding offerings such as fried chicken and gourmet burgers to our menu has resonated well with consumers and brought them to our stores for different dining occasions,” he added.
The company said it was tackling inflationary pressures through key pricing, product mix levers as well as cost-cutting initiatives. Most restaurant chains, including Westlife, have already raised prices in response to inflationary challenges.
Dealing with price increases
“We typically do price increases of around 2-3% per year. Over the past 3-4 years, price increases have not exceeded 3%. In a difficult inflationary environment, we have always maintained that price increases can be up to 5%.At the moment, I don’t foresee any more price increases, but we will have to reassess that in about four to five months,” Jatia explained.
He added that the QSR restaurant segment tends to win over other segments as price-sensitive consumers typically turn to the QSR segment during tough times with high inflation.
Over the past two years, the company said it has focused on making the McDonald’s brand more accessible and convenient through various digital touchpoints such as the McDelivery app, the McDonald’s app and self-ordering kiosks in restaurants. These digital touchpoints now contribute about 57% of company revenue, the company said.
May 22, 2022