While McDonald’s serves as a great example of successfully Indianising a global brand, it is also an insightful case study in strategically making transit retail work
McDonald’s introduced Indian masses to the American fast food-burgers, enticing them to include the western food in their meals.
Over the years, Westlife Foodworld Ltd. (WFL), which operates McDonald’s restaurants in West and South India, through its subsidiary Hardcastle Restaurants Pvt. Ltd. (HRPL) set an example for international brands of successfully Indianising a global brand. At the same time, it emerged as an inspiring case study in strategically leveraging the benefits of transit hubs and making transit retail work for a business.
The company has a master franchisee relationship with McDonald’s Corporation USA, through the latter’s subsidiary. WFL operates restaurants through various formats and brand extensions. These include drive-thrus, McCafé’s, 24×7, McDelivery, McBreakfast and dessert kiosks. The company is aiming for a 15%-18% contribution of McCafé to its business by 2027, it said in its July 2024 earnings presentation.
For the quarter ended June 30, 2024, WFL, which is a listed entity, reported sales of Rs 616 crore, a 0.3% year-over-year increase.
With travellers, everywhere
Think about it. Whether one is travelling by road, train, metro or airplane in India, isn’t there always a McDonald’s nearby? The burger chain, which opened its first restaurant at Bandra in Mumbai back in 1996, has ensured that it is strategically present across all transit hubs, including major highways, airports and around bus stands in some format or the other—Drive-Thru, McCafé or a standalone store. When driving long distances, the golden arches are unmissable from a kilometre away.
Counted among the early movers in the transit retail segment, McDonald’s started opening large stand-alone stores near major highways in the early 1990s when India’s road infrastructure revolution began. It continued to be present as the country’s airport infrastructure evolved too.
In fact, the chain’s milestone 400th store opened at the International Departures of GMR Hyderabad International Airport in May 2024.
“Locations in high-traffic transit hubs like highways, airports, train stations, allow us to reach customers who are on the go and in need of comforting and convenient food options. These transit retail environments are valuable real estate that enables McDonald’s to maintain a strong brand presence,” Saurabh Kalra, managing director, Westlife Foodworld (McDonald’s West & South).
“Customers travelling through these busy locations represent a key target demographic for us—they are often pressed for time and looking for familiar and reliable dining options,” he explained.
Doing it with drive-thrus
Drive-thrus deserve a special mention when talking about McDonald’s. It was among the first quick service restaurant (QSR) chains to introduce Indians to the convenience of a drive-thru, a concept which was largely Western until the first McDonald’s drive-thru opened at Navi Mumbai’s Kalamboli way back in 2001. Over the last 20 years, drive-thrus, part of its off-premise business, which also includes, take-away, delivery and on-the-go delivery, have been a key driver for McDonald’s. In the quarter end June, the off-premise business grew 6% year on year (y-o-y) contributing 42% to total sales.
In August last year, McDonald’s opened India’s first Airport Drive-Thru restaurant in Mumbai. Located just 100 meters from Terminal 2 (T2) of the Chhatrapati Shivaji Maharaj International Airport (CSMIA), this is also the first McDonald’s restaurant in Mumbai to operate 24×7.
Spanning over 3,000 sq. ft., this drive-thru with McCafe provides customers with a dedicated drive-thru lane and customer ordering display (COD) to speed meals on the go.
It also guarantees delivery in just 120 seconds as part of McDonald’s India Service Guarantee programme. Furthermore, it has 4 self-ordering kiosks (SOK) installed at the restaurant to help customers save time and offer a quick, digital, and smart ordering experience.
This is the chain’s third restaurant at the international terminal.
In May, the company opened a 3510 sq. ft. free-standing drive-thru at Zundal- Vaishnodevi Circle Road on SP Ring Road in Ahmedabad.
In June 2024, 82 out of McDonald’s 403 restaurants in West and South India were drive-thrus.
McDonald’s has announced its target to grow its restaurant footprint to 580-630 locations by 2027 with drive-thrus being a major part of them. About 30-35% of its new stores in the next 4-5 years would likely be drive-thrus, located across all city suburbs and national highways, the company said in a statement, earlier in the year.
Reinvention Journey
Apart from ensuring that it is accessible to consumers not just at transit points but even as they shop in malls or on high streets, McDonald’s is on a continuous journey of reinventing itself, whether it’s the menu or its stores. Burgers by nature are considered fast food. However, over the years, McDonald’s India has been on a journey to up the nutrition quotient of its products under its ‘Real Food Real Good’ platform. In 2018, the brand announced that its famous McAloo Tikki burger had been tweaked to make it a wholesome meal. Ingredients in the burger were modified to ensure that it contained the right amount of protein, fat, and carbohydrates to make it a balanced meal as per the recommendations of National Institute of Nutrition, Hyderabad. More recently, in September 2024, McDonald’s introduced a muti-millet bun in partnership with partners with Central Food Technological Research Institute (CFTRI). The brand was working on introducing many more products with the premiere institute.
On the store design front, the company steadily moved towards giving an enhanced dining experience at its outlets and introduced the Experience of The Future Restaurants (EOTF) concept restaurants which were digitally powered. They have self-ordering touchscreen kiosks, and table service through tech-enabled trackers. These initiatives were taken under the able leadership of Akshay Jatia, who is now the executive director of the company. The company has now turned its focus on growing its presence in South India and will try to penetrate the region better. “As part of our Vision 2027 strategy, more than 50% of our new store openings will be focused on the South region, with a particular emphasis on drive-thru restaurant formats in the suburbs and along national highways,” Kalra said adding that the brand sees potential in the Tier 2 cities of South India and will be accelerating its growth in the area.
