McDonald’s India earmarks ₹500 crore to ramp up footprint

Hardcastle Restaurants Pvt Ltd (HRPL), master franchisee for West and South India operations of McDonald’s, has earmarked an investment of ₹500 crore to ramp up its restaurant footprint by 175 to 250 restaurants over the next five years across West and South India.

HRPL will add 35 stores every year across formats and brand extensions spanning standalone restaurants, drive-thru’s, 24/7, McDelivery, dessert kiosks and hire 10,000 people to staff these formats over the next five years.

“The South market is a key focus area for us. We opened the first McDonald’s restaurant on Brigade Road in Bangalore in 2006, and today have 74 restaurants in the South, including Chennai, Hyderabad, Coimbatore, Kochi and Mysore. We will open 60-70 per cent of the restaurants in existing cities and the balance 30-40 per cent will be in new markets to increase our reach. In the West, we are focusing primarily on Gujarat and Madhya Pradesh,” Arvind Singhal, Director – South, McDonald’s India (West & South), told BusinessLine . HRPL serves 165 million customers annually at its 189 McDonald’s restaurants in Telangana, Gujarat, Karnataka, Maharashtra, Tamil Nadu, Kerala and parts of Madhya Pradesh and provides direct employment to 7,500 employees.

To stay more relevant to its customers in the South, the menu offers a different mix of vegetarian and non-vegetarian food options based on local customer preferences.

“In Bangalore, 55 per cent of our menu is vegetarian, whereas in Chennai, the menu is 55 per cent non-vegetarian, and in Kerala, where customers prefer non-vegetarian food, just 20 per cent of the menu is vegetarian,” pointed out Singhal.

To counter increasing competition from other quick service restaurant (QSR) players who are wooing the Indian palate with new food choices, McDonald’s introduced three new saucy wraps last month – Aloo Wrap, Egg Wrap and Grilled Chicken Wrap, which will be permanent additions to its core offering of burgers and fries.

McDonald’s has strengthened its connect with millennial consumers by launching a mobile ordering app for McDelivery three months ago. Its web ordering platform launched in 2013 contributes to 25 per cent of the company’s overall revenue.

The QSR space is a part of the Informal Eating Out (IEO) industry, consisting of fast food, pizza delivery and coffee shops, representing about $15.6 billion or 18 per cent of the total IEO market in India.

The entry of McDonald’s in 1996 revolutionised the QSR business in India, heralding the entry of a number of global brands.