Western quick-service restaurants
(QSRs) have gained from the Covid-19 pandemic as consumers increasingly gravitate towards organised players. In a conversation with Viveat Susan Pinto, Amit Jatia
, vice-chairman, Westlife Development, which runs McDonald’s restaurants
in the West and South of India, says organised players will get even stronger in the months ahead. Excerpts:
We have exited the quarter with a 97 per cent sales recovery in December. Month-on-month the business has been getting better, as the government relaxed restrictions. Dine-in sales in December was 83 per cent of pre-Covid levels, which is a good sign. Also, sales from our convenience channels such as take-away, delivery, and drive-throughs remained robust. This indicates that the confidence in organised players, especially, western QSRs, remains intact. Which is why there is no drop in sales from convenience channels even as dine-in is staging a comeback.
But aren’t organised players at a greater advantage with the eating-out market having shrunk due to the pandemic?
Yes. The informal eating-out market has shrunk by 25-30 per cent because of the pandemic and the preference for safe and hygienic eating places. Within this, the western fast-food chains have suffered less because trust codes remain high for these brands. Having said that, western QSRs, too, have had to work hard to maintain the trust that consumers have in them. Rigorous quality checks, sanitisation, food safety — these are the mantras we believe in and there is significant effort that has gone into maintaining safety and hygiene at all times.
How big a threat is Burger King for McDonald’s?
We’ve been around for over two -and-a-half decades. Competitors have come and gone. We still have over 90 per cent share within burgers (in India). That speaks for itself. Competitive intensity does not bother us. Burger King has been in the market for six years and they have been opening restaurants.
Yet, we’ve grown our average unit volumes by 60 per cent in the same period. Obviously, we are doing something right to attract this level of business.
What are the trends you are seeing in the eating-out space?
Restaurants, which are skewed towards workplaces or located near educational institutes or near intra-city travel points, have been impacted more. However, window sales at drive-through outlets have more than doubled. I see this continuing for some time as work-from-home remains.
But when do you see normalcy returning now that vaccination drive has begun?
I do see normalcy returning by June-July after the first phase of vaccination is over. Of course, there will be a sense of hygiene. Staying at home all the time will be difficult, prompting people to step out, to shop, eat, and socialise.
Do you see store additions getting accelerated in the future?
It will happen. In the December quarter, we opened three new stores. We will exit this financial year adding a few more stores. By FY22, we will get back to adding 25-30 stores per annum.