McDonald’s main franchise for West and South India, Westlife Development plans to add 35-40 restaurants by the end of this fiscal year and 200 new stores over the next 3-4 years. The company will invest around Rs 800 to Rs 1000 crore for the planned expansion, Amit Jatia, Vice Chairman of Westlife Development Limited, told FinancialExpress.com. “In terms of outlet types, we have our property portfolios, which means we’re not over-leveraged to any particular outlet type. So we have a very strong portfolio of drive-throughs, shopping streets, malls and food courts. Because the portfolio is very balanced, our risk was managed very well during Covid,” he said.
Earlier yesterday, Westlife announced a net profit of Rs 23.58 crore in the quarter ended June 2022, compared to a net loss of Rs 33.99 crore in the same period last year. In the quarter under review, the company’s revenue increased by 107.6% year-on-year to Rs 537.93 crore from Rs 259.16 crore in the same period last year. With its operating costs and expenses at Rs 421.53 crore, Westlife recorded a 365.5% year-on-year increase in the company’s restaurant operating margin, which is Rs 116.4 crore from Rs 25.5 crore the previous year.
“Despite a difficult external environment and inflationary pressures, we are showing consistent performance. We managed to improve the margin by around 100 to 130 basis points in terms of EBITDA,” said Amit Jatia. Westlife Development is the owner of Hardcastle Restaurants Pvt Ltd and the master franchisee of McDonald’s restaurants in West and South India. The company’s expansion plans include reimagining, “Experience of The Future” (EOTF) restaurants, and more.
What works for McDonalds in West and South India?
The Company’s comparable store sales growth (SSSG) for the quarter was 97% year-over-year. It also recorded a PAT of over Rs 23.1 crore during the quarter. “Our omnichannel strategies, menu innovations where we focus on the meal offering and the type of experiences we provide our customers are working for us. In fact, our in-store returns are now 14% higher than 2019 levels, in the same quarter. In addition, our delivery business also increased by 13-14%,” Akshay Jatia, executive director of Westlife Development Limited, told FinancialExpress.com.
McDonald’s business recovered faster for the food and convenience channels. While restaurants grew fivefold from a year ago, convenience growth remained healthy at 13% year-over-year. Dine-in, along with the various convenience channels of delivery, take-out, drive-thru and travel, are currently generating more than Rs 450 crore in sales per quarter, the company said in a statement. In terms of menu innovation, the company launched a range of premium burgers this year with the Gourmet Burger Collection. “Also, McSpicy Fried Chicken on the menu really has great potential in South India and we are aiming to get a decent share of that market,” said Amit Jatia.
Westlife has a total of 331 restaurants in 48 cities, as of June 2022, with 65 drive-through restaurants, 267 McCafes and 132 Experience of the Future (EOTF) restaurants.