Westlife Foodworld, which owns the franchise for McDonald’s in west and south India, intends to double its sales to Rs 4,000-4,500 crore in the next five years on the back of menu innovation, omnichannel presence and network expansion.
“We have laid out three levers on how we are going to achieve these sales. We will be focusing on meals in our menu, being omnichannel and expanding our network. We will build brand market fit through meals, omnichannel presence and add 300 stores in the next five years,” said Akshay Jatia, executive director at Westlife Foodworld.
In meals, McDonald’s will build further on its core products which are burger, chicken and coffee. Jatia said that the company will continue to work on beverages along with coffee and going forward they will only strengthen these platforms further through product and promotion excitement.
According to the company, mealtimes will represent 67% of India’s dine-out spend in the next five years.
Also, building on growing demand for coffee in the country, Westlife intends to become category leader in the coffee market by inducting new consumers. The company plans to include McCafe to 100% of its stores from 85% currently with contribution to sales at 15-18% by 2027 from 12% currently.
In terms of network expansion, company has accelerated growth in southern market as 60% of new stores are likely to be in south.
In the next five years, company will open 45-50% stores in west and 50-55% in south .
Westlife plans to transform into a digitally integrated brand to enable a seamless consumer experience across multiple touch points. For dine-in business they plan to convert 100% of restaurants into ‘experience of future stores’ which deliver better consumer experience and higher average checks from orders through kiosks.
The company will also build drive thru destination stores across all city suburbs and national highways. Going forward, around 30-35% new stores are likely to be drive-thrus.
While McDonald’s plans to double its sales in the next five years, it is also targeting around 600 basis points margin expansion to 18-20% operating Ebitda margin by 2027 through improved volumes and cost saving initiatives.
The company expects 80 – 100 bps margin improvement target through cost Savings, 300 – 350 bps through operating leverage, and 100-150bps margin expansion through product mix improvement and net pricing.
Jatia said that the volumes will come through meals, omnichannel presence and expansion in right markets like that in south and smaller towns. And volumes will be converted to profits through managing cost, managing product mix price the product mix effectively.