Financial Daily from THE HINDU group of publications
Thursday, Jun 20, 2002
Marketing - Retailing
McDonald's India to double investments Plans outlets on highways, railway stations
NEW DELHI, June 19
THE Big Mac is aiming for a bigger bite of the Indian market.
Investments in McDonald's India Pvt Ltd (MIPL), the wholly-owned subsidiary of US-based fast food giant McDonald's Corporation, are expected to be doubled, from Rs 400 crore which have already been pumped in, to Rs 800 crore by 2005.
Speaking to Business Line, Mr Vikram Bakshi, Managing Director, McDonald's India, said that the fresh investments would take care of expansion of McDonald's India's supply chain, refurbishing its cold chain, and setting up more outlets within the country. Investments in one outlet entail an investment of Rs 2-3 crore, which includes cost of leasehold equipment, signages, seating arrangement and decor.
Mr Bakshi added that the quick service chain would meet its target of breaking even on operations by December 2003, and expand to 80 outlets within the same year.
The quick service chain intends to set up 16 outlets within the current year. These are expected to be a combination of highway restaurants, outlets at railway stations, at shopping malls and cineplexes, besides at residential areas with significant footfalls.
"We have recently won the tender for setting up a McDonald's outlet at railway stations in Mumbai and Jaipur. In Delhi, we will set up our outlet at the Delhi Metro station, and our fourth highway outlet at the Delhi-Jaipur highway will begin operating in the first week of July. The current year will be our biggest in terms of restaurant openings," Mr Bakshi said. The chain's other three highway restaurants are located at the Delhi-Agra highway, at the Delhi-Ludhiana highway, and one at the Mumbai-Pune highway, which came up last year.
In talks with Nestle
Meanwhile, McDonald's India is evaluating consumer response to a range of Nestle products, including Nestle iced tea and coffee, sauces and food toppings. The Nestle products are being served at select McDonald's outlets, and based on the consumer's feedback, appropriate tie-ups could be worked out, Mr Bakshi said.
The chain has a tie-up with Coca-Cola for carbonated beverages and is also test-marketing Coca-Cola's Georgia tea at a few outlets.
Another tie-up was inked last year with Cadbury India for McSwirl - ice-cream topped with chocolate sourced from Cadbury's - priced at Rs 12.
On the menu front, Mr Bakshi said that two products (one dessert and one salty product) were in the process of being researched and would be introduced within the current year.
Walk-ins at the quick service chain currently average 4,000 people per outlet per day, Mr Bakshi said.
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