The Hindu Business Line : Big Mac to head South, finally

Mr Vikram Bakshi, Managing Director, Connaught Plaza Restaurants Pvt Ltd, the equal joint venture outfit for northern India with McDonald's, said the delay in setting up the outlet in the South had to do with the setting up of its distribution hub as well as finalising the model for running the operations in the South.

While the two companies representing McDonald's in India, Connaught Plaza and Hardcastle Restaurants in the western region, are joint ventures with McDonald's, the Bangalore outlet will be franchisee-run and all the investments would come from the franchisee. McDonald's outlets are serviced through centralised distribution hubs in Mumbai and Delhi, whose logistics are run by Radhakrishna Foodland Ltd. The Bangalore outlets would be serviced by the Mumbai hub and depending on the response, McDonald's will take a decision on a distribution hub as well as expanding its network in the South. Currently, the McDonald's distribution chain is serviced by 32 suppliers, with stuff ranging from its breads to lettuce and cheese.

McDonald's has 35 restaurants in the North and 21 in the Western region. The brand has a tie-up with BPCL and currently operates two outlets at BPCL petrol outlets on the Delhi-Agra and Delhi-Ludhiana highways. "We are looking at more options with BPCL," said Mr Bakshi. It is also opening outlets along the Delhi Metro line and already has one operational.

Mr Bakshi said that it was wrong to perceive McDonald's as an expensive brand as today, 53 per cent of its sales came from SEC A consumers, 40 per cent from SEC B and 7 per cent from SEC C. "When we started, 83 per cent of our sales came from SEC A consumers," he said.