McDonald's readies for pitched burger battle

The transformation in Indian consumers’ lifestyles over the years has tremendously helped the IEO (Informal Eating Out) industry to grow, and expected to reach a value of $1.2 trillion by the end of this year, on account of market expansion by existing players and entry of new ones.

Several western fast food players are making a beeline to serve the Indian taste buds, and help grow the niche restaurant concept known as QSR or Quick Service Restaurant, which is growing at a rapid pace, given the industry’s focus on affordable and competitive pricing combined with the rising consumer need for convenience and the craving for international food.

According to the National Restaurant Association of India (NRAI), the organised QSR business in India is estimated to grow at a CAGR of around 25 per cent to reach approximately Rs 16,785 crore by 2018.

One of the early birds on the scene with a marked impact on the country’s eating out culture, the American fast food and burger legend, Mcdonald’s, has at present 375 restaurants pan-India — across West and South (Westlife Development is the master franchisee), and North and East (Connaught Plaza is the master franchisee).  McDonald’s is now mulling great expansion plans, aiming to open around 30-40 outlets in West and South each year, going forward.

“We are investing around Rs 750 crore over the next five years to open around 250 more restaurants (in West and South), thus doubling our base,” Westlife Development Vice Chairman Amit Jatia told Deccan Herald.

The company’s successes have heralded a new era of the QSR trend In india, and competition has only begun to brew. But this has not deterred McDonald’s which is surging ahead with a promising strategy, aiming to hold onto a massive figure of around 325 million customers served each year.

Competition is good

“The world over, McDonald’s commands a system-wise sales worth a strong $80 billion, with the next largest QSR brand mustering sales of just over $18 billion. Competition is good, for the market is bound to grow. But one must realise how the many aspects of the QSR segment are diversified,” Jatia said.

As part of the strategy for McDonald’s, Jatia said that the core agenda is on reimaging the brand, its menu, its service and its restaurants, besides maintaining a robust localised supply chain and releasing newer concept.

“In the last 18 months, we have been able to roll out a new online delivery platform and application. We have also rolled out a new concept — McCafe — opening 40 outlets of the same. Besides, fresh additions to the menu have all been well-received by our patrons,” Jatia said.

In the recent past, the company introduced a host of items such as the piri piri fries and smoothies, among others. In South India, it launched its chicken wings, and very recently, it began offering Focaccia buns as a flavoured option for burgers. And the company is constantly evolving new things to eat.

In FY15, the company (Westlife Development) earned revenues of Rs 780.8 crore, besides a CAGR of 24 per cent for the period FY08-FY15.