How convenience channel helped McDonald’s Restaurant operating margin soars by 204% in West, South India

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"In the coming months, we will pick up the pace on store expansion, adding close to 30-35 new stores in our core and emerging markets, thus increasing our penetration,” shared Amit Jatia, Vice-Chairman of Westlife Development Limited.
  • Nusra Deputy Features Editor
McDonald's

Westlife Development Limited, owner of Hardcastle Restaurants Pvt. Ltd. announced unaudited financial results for the quarter ended September 30, 2021.

In the quarter under review,the Company’s revenues surged by a robust 84% YoY to ₹ 3,854.2 million, with the Same Store Sales Growth also at a solid 84% YoY.

Growing with convenience channels

Driven by convenience channels that continued to accelerate and dine-in that built up strong and fast.

Convenience channels that include delivery, take-out, drive-thru and on-the-go grew by a robust 77% over last year. This is in spite of a strong recovery in dine-in revenues, which almost doubled over same quarter last year.

“With this strong performance, I believe, a newer and stronger normal has emerged for us.  We will continue to make bold moves to reinforce our market leadership. In the coming months, we will pick up the pace on store expansion, adding close to 30-35 new stores in our core and emerging markets, thus increasing our penetration,” shared Amit Jatia, Vice-Chairman of Westlife Development Limited that operates McDonald’s in West and South India.

According to the statement, September 2021 - when most restrictions were eased -saw a 103% recovery vis-à-vis September 2019 which was pre covid. The Company saw complete recovery across all its markets despite continued restrictions on time and capacity in some key cities.

Its delivery sales grew 50% over September 2019 –again a testimony to the strong convenience channel that the Company has built over the last 18 months. 

High on Expansion

The Company continued to hold strong on its margin performance, despite all inflationary pressures. Its Gross Margins surged by 87.5% YoY while Restaurant Operating Margins jumped by a robust 204%.  As a result, its Operating EBITDA surged 11 times YoY to Rs 457.4million.

Earlier this month, Westlife Development announced that it will be investing INR 800-1000 crores in the business over the next 3-5 years. It aims to double its footprint, reimage all restaurants to EOTF, further strengthen its technology prowess and drive cutting edge menu innovation.

Innovation at bay

Menu innovation, omni-channel acceleration and network expansion remain the cornerstones of Westlife Development’s growth strategy. The Company has been adding new, clutter-breaking products.

This quarter, it also introduced two new immunity boosting beverages – Turmeric Latte and Masala Kadak Chai to its McCafé portfolio. It also added new products to its exclusive McBreakfast menu.

The Company’s all day-part menu gives it a unique competitive advantage in terms of AUV, which has been a key strength for brand McDonald’s globally as well.

“While this will help grow our topline, an upward trending AUV, aided by burger leadership, chicken leadership and McCaféwill help us both enhance both topline and profitability,” added Jatia.

The Company has also taken a future forward view on its digital investments and traversed a strong journey to being a food tech company.

At present it operates 310 McDonald’s across West and South Indian market.

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