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Westlife Development Ltd, which runs McDonald’s restaurants in West and South India through its subsidiary Hardcastle Restaurants Pvt Ltd, said that it will add 30-40 additional stores in the current fiscal.
The company has a broader goal of adding 200 restaurants in the next 3-4 years. The company has been typically adding about 25 new restaurants per year.
“We are looking at adding between 30-40 outlets in this fiscal. The share of the western fast-food segment in the eating out category has been growing and that’s helping us add new stores. Brand relevance is also helping our profitable store expansion,” said Amit Jatia, Vice-Chairman, Westlife Development Ltd.
It currently operates 326 restaurants and 262 McCafe across 47 cities. It has so far refurbished 118 McDonald’s outlets in line with the digitally-enabled ‘Experience of the Future’ concept.
Q4 earnings
In terms of its fourth-quarter earnings, the company said that post the third pandemic wave, it has witnessed a “full recovery in the dine-in business.” It also clocked “same-store sales growth (SSSG) of 23 per cent in the March quarter“.
Consumers have come back strongly for the dine-in services while the convenience channels continue to trend well. “Along with that, the addition of offerings such as fried chicken and gourmet burgers to our menu has resonated well with consumers and brought them to our stores for different meal occasions,” he added.
The company said it has been tackling inflationary pressures through key levers of pricing, product mix as well as cost-saving initiatives. Most restaurant chains including Westlife have already taken a price hike in response to the inflationary challenges.
Tackling price hikes
“We typically do a price hike of about 2-3 per cent in a year. In the last 3-4 years, price hikes haven’t gone beyond 3 per cent. In a challenging inflationary environment, we have always maintained that price hikes can go up to 5 per cent. Right now, I’m not anticipating any more price increases but we will have to reevaluate that in about four to five months,” Jatia explained.
He added that the QSR restaurant segment tends to gain over other segments, as price-sensitive consumers typically move towards the QSR segment during challenging times with high inflation.
In the last two years, the company said it has been focusing on making the brand McDonald’s more accessible and convenient through various digital touchpoints such as McDelivery App, the McDonald’s App, and self-ordering kiosks at the restaurants. These digital touchpoints now contribute about 57 per cent of the company’s revenue, the company said.
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