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American restaurants chain, McDonald’s plans to increase its presence in smaller towns and non-metro cities in India. Hardcastle Restaurants Pvt. Ltd (HRPL), the master franchise for the Western and Southern operations of McDonald's in India, plans to invest around Rs 750 crore over the next 4-5 years for expanding restaurant network in India.
The company, which is the wholly owned subsidiary of Westlife Development Limited, plans to add about 175 to 250 new stores to its existing 189 restaurants in India, this will take the total tally to around 400 stores in next four-five years.
HRPL managing director, Smita Jatia told Business Line, “We will require an investment of about Rs 750 crore for next 4-5 years and that will be met through internal accruals and tied up debt. Out of the new planned stores, about 60-70 per cent will come up in key big cities, while about 30-40 per cent will be set up in non-metros and smaller towns or highways.”
“With disposable incomes at semi urban areas has increased and people’s aspirations to experience brands has gained momentum, there is good potential in smaller towns now,” she said.
The company is also adding McCafe brand to offer beverages. McCafe is seen as an extension of the brand McDonald’s which has been offering quick service foods.
At the launch of 11th McCafe in India and first in Ahmedabad, Ms Jatia informed that the company plans to open about 75-100 McCafe stores across the country in next 2 years. Each store will attract an investment of Rs 30-35 lakh.
The café would offer premium specialty coffee including cappuccino, latte, iced mocha and frappe from 100 per cent premium Arabica coffee beans sourced from Chikmagalur.
Quoting Technopak Advisors, Jatia informed that the organized café market in India, is currently $230 million (approx Rs 1380 crore) and is likely to hit $410 million (approx Rs 2460 crore) by 2017. “We see a huge potential here and will continue to expand our beverages platform to serve as one stop destination for all customers across all day parts. In fact, Ahmedabad is only the second city in India, after Mumbai, where we have opened McCafe,” she added.
In Gujarat, McDonald’s has 23 restaurants, which it plans to double in the next two years.
In the year 2013-14, the company had registered a total turnover of Rs 74 crore, which is expected to grow at the industry growth rate of about 10-15 per cent in the current year.
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