Does the business environment look positive now? Where do you see growth coming from?
Gloomy days are now past and consumer demand and sentiment is picking up. Discretionary spending and frequency of eating out is growing. But we have to be prepared for macroeconomic shocks. Traditionally, demand picks up during election years. Hopefully, we will see a similar trend in coming months.
Consumer footfall has increased steadily across retail platforms in the past 12-18 months and our stores have observed the rise as well. Moreover, per ticket revenue has also grown during the past few quarters. Fast-food restaurants make just 1 per cent of out-of-home eating business in India. Thus, all types of locations would be in target when it comes to opening up new stores.
But food inflation is increasingly becoming a concern…
We are prepared for an inflationary cycle. So are our suppliers and partners. Inflation has been at the higher side — over 7 per cent — in India. Our product mix is an important lever to adjust against inflation. We have a moving 12-18 months plan and are not contemplating hiking prices more than 3 per cent a year.
The anti-profiteering authorities are checking for any flaw in passing on of GST benefits. How will you face them?
They are reaching out to everyone and we are prepared. Last November, when input tax credit was taken away, our model took a hit of 10-12 per cent. We can show the difference between the tax structure between July and October in 2017 when input tax credit was in place and what it is now.
What is your growth plan?
Every year, we plan to open 30 restaurants and our target is to have 450 outlets by 2022 from 280 now. All our restaurants will have a McCafe zone in next two years.