McDonald's in India smells more profit in coffee
Westlife Foodworld, the master franchise owner for McDonald's in western and southern India, is likely to open McCafé in all its outlets.
Westlife Foodworld, the master franchise owner for McDonald's in western and South India, plans to open McCafé in all its franchisees. McCafé is a coffee-house-style food and beverage chain, owned by McDonald's. Currently, there are McCafes in 274 stores out of the total 337 present in the geography.
In fact, the plan is to have over 400-500 McCafés in the next few years. The management reckons each McCafe store costs Rs 20-25 lakh to make and expects revenue at 4x of the investment from these.
The company reported a stellar set of earnings for the second quarter of the current fiscal with its highest-ever quarterly sales. Revenue was up 44 percent versus the pre-COVID base and a 40 percent same-store sales growth as well.
“I feel the game of McCafé is yet to play out. Today we have about 260-270 McCafé. The plan is to be in every single restaurant. Therefore, the idea is to double the base along with restaurants. So hopefully we will have 400-500 McCafé”, Amit Jatia, Vice Chairman, told CNBC-TV18.
Westlife Development Limited (its wholly owned subsidiary Hardcastle Restaurants Pvt. Ltd.) owns and operates the master franchisee of fast food chain McDonald's in West and South India and has re-named itself as Westlife Foodworld Limited.
According to the management, the average unit volume per McCafé has done well.
“I think that is going to double to triple as consumers start recognizing that McDonald's has something called McCafé, and it's resonating. Therefore, the opportunity to McCafé is huge and that helps us with gross margins as well,” said Jatia.
For more details, watch the accompanying video
(Edited by : Abhishek Jha)
First Published: Nov 10, 2022 2:46 PM IST
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