Fast food chain McDonald?s India is eying aggressive growth this year. The company will be spending Rs 100 crore this fiscal on adding 40 new outlets, increasing customer engagement by adding more touch points such as dessert kiosks and online booking and will also commission a new food processing unit in north India. FE?s Rahul Sharma caught up with Vikram Bakshi, MD, McDonald?s India (North and East) on the company?s growth last year, its plans for this year and what more consumers can expect from the McDonald?s kitchen.

How much revenue growth did you record in the last fiscal?

McDonald?s stayed relatively recession resistant through this period and our sales expanded at a healthy rate of 13%, which is strong considering the market conditions that prevailed in India.

How much have you been hit by inflation and rising input costs?

The impact has been there, but the way the fast food market has been expanding, I would say it was minimal. At McDonald?s, we have long term supply agreements with our vendors, so in certain ways we were spared from fluctuations in the input costs.

We also follow differential pricing model in certain premium retail environments ?which also helped in mitigating this impact to a degree. But most importantly, rather than worrying about the cost impact, we focused towards introducing new value offerings like EVM?s (Extra Value Meals) for the customers, which received an overwhelming response from the markets. Its success has been instrumental in driving the sales and the volumes up?which also helped in mitigating the impact.

You spoke of introducing a range of premium food items. Why are you going beyond the affordable products concept?

McDonald?s would always stand for affordability and value. This is our strength and our customers recognize us for that. We will never leave this positioning.

We are looking to strengthen our premium products? portfolio?as we felt the need to respond to a growing pool of loyal customers, who have been demanding interesting great tasting products and do not mind paying for it. It is interesting to note here that our premium food products are still affordable and come at a great value.

Moreover, we are a mass market brand, and it makes sense for us to have products for customers across the segments.

We have not yet firmed the products, as we are working on a variety of products for this category. We are exploring both international products and are also working to developing local products, so let us see how it shapes up. We are targeting for a launch by this year-end.

How much investment have you lined up for this fiscal?

We have earmarked a corpus of nearly Rs 100 crore which will be used for opening new stores; new product development and innovations; and towards developing our existing stores.

Where would the next 40 stores come up?

We will continue to strengthen our presence in NCR (national capital region of Delhi) as we will feel the market here is still underserved. Also, we will continue to expand in other existing markets. I cannot give you further details on this, as we are aggressively exploring opportunities in both existing and new cities. Kolkata will see more McDonald?s opening ?Rajasthan, Punjab, Uttarakhand, Madhya Pradesh, are other markets where we will increase our penetration.

How are you planning to push same store revenue growth?

We are optimizing our existing assets by introducing new platforms like breakfast menu, McDelivery services, extended hours, Drive Thru, dessert kiosks in them. We are also targeting to optimize our stores with McCafe?s, which we are looking to introduce in India by 2012-13. This would help in expanding the same store sales and also help in creating a compelling reason for McDonald?s to become part of the consumer?s life.

The breakfast menu has been one of the other big successes for us in recent times. We tested it in the market for more than a year–the response has been great which has encouraged us to expand it in other stores. We are looking to introduce it to nearly 40 stores across India by August. This clearly shows that there is an unexpressed demand for OOH (out-of-home) breakfast.

By when would McCafe be introduced in India?

We are planning to launch McCafe in India by the year 2012-13…the plans are on the drawing board right now and will take one-and-a-half to two years to mature and implement the concept.

When we launch McCafe?s in India, apart from global coffee flavours, we would also be looking to introduce beverages that suit the Indian palette, but then it is still early days for that story to build out.