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McDonald’s has introduced a new range of burgers with different price points, in an attempt to reinforce its positioning as a value brand. The range begins with its cheapest egg burger at Rs 25 going up to Rs 90 for a Maharaja Mac.
Their latest offering is the Masala Grill burger at Rs 45. Amit Jatia, Vice-Chairman, Westlife Development, said, “We have created another price point with the new product Masala Grill. Against the backdrop of the GDP slowing down, it does make things difficult but McDonald’s has always been a value brand. In a difficult market we have managed 25 per cent revenue growth.”
The burger chain has also been extending its value-based meal offerings. In 2004, McDonald’s introduced the Happy Price Menu and then in 2009 it offered Extra Value meals and this year it was its McValue Lunch at Rs 55.
While it has been managing to resist price hikes of late with service tax being imposed, the burger chain was forced to increase prices by almost a similar amount (5 per cent) in April this year.
“We have been saving costs on the supply side by increasing farm acreage capacity. Even transportation costs have been reduced by bringing our plants closer to raw materials used. This should help us maintain prices going forward,” added Jatia.
McDonald’s plans to invest Rs 400 crore to add another 75 to 100 outlets in the next two years. Despite being part of a listed entity now (Westlife Development), it intends raising money for the same through debt and internal reserves. Most of these new stores would continue to be in the metros and mini metros.
“While we have already gone into tier 2 and 3 towns, almost 60 per cent of our stores will be in the metros which have the largest population,” added Jatia.
The burger chain is also exploring new formats, such as café chains under McCafé. “The USP of McCafé is again about coffee at affordable prices. The format is already there in the US and South East Asia and we are open to bringing it to India,” said Jatia. McCafé as a concept is nearly a decade old.
Meanwhile during this IPL season, the chain is also making sure that people at stadiums such as Wankhede in Mumbai get to eat its burgers and french fries. “We like IPL and have been selling at venues like Wankhede and have also been advertising during the tournament,” added Jatia.
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