Saurabh Kalra, MD, Westlife Foodworld (McDonald’s West & South) on the burger chain’s vision 2027 and strategies for achieving it
Westlife Foodworld Ltd. (WFL), which operates McDonald’s restaurants in West and South India, through its subsidiary Hardcastle Restaurants Pvt. Ltd. (HRPL) has set its focus on expanding its presence in South India, managing director Saurabh Kalra said.
WFL 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.
As of June 2024, the total restaurant count stood at 403 restaurants across 66 cities. About 92% of these restaurants have McCafes, 86% are EOTF restaurants and 20% have drive-thrus. 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.
A majority of the company’s restaurants are in West India. The company now plans to strategically increase its presence in Southern parts of the country. This is part of the company’s Vision 2027 which is being operationalised by Kalra.
Kalra, who joined Hardcastle Restaurants Pvt. Ltd. (HRPL) as a management trainee, leads the execution of McDonald’s velocity growth plan, providing a blueprint for strong sales and profitability across all brand levels.
In an exclusive interview with IMAGES Retail, Kalra speaks about McDonald’s Vision 2027 and its strategy for achieving it.
What are McDonald’s plans for India?
McDonald’s Global operates in 130 countries. As far as India is concerned, and we at Westlife are concerned, we believe that there is a pace of growth which we need to manage and that has been laid down in our Vision 2027. We are going to have around 580 to 630 restaurants by December 2027 and for that, we require a pace of around 40 to 50 restaurants a year. Last year we were able to do that and we are on track for opening that many this year as well. So, we’re pretty comfortable as far as achieving our vision is concerned.
Isn’t 40-50 restaurants a year an easy pace to scale up?
We believe India is a 20-mile March and we have set up a pace in which we can grow continuously without compromising on our profitability, in good times as well as bad. Earlier, our pace used to be five to 10 restaurants a year, we moved it up to 10 to 15, and then finally 20 to 25 is what we have been doing in the last seven years. Now, we said we need to change that pace to 40 – 50. We do not believe in opening stores and then shutting them down. We would like to continue in the same place forever and that is why we do long leases.
Earlier McDonald’s strategy was to open stores on highways. What is the strategy going forward for the new stores?
McDonald’s is always available where the consumers are. We have restaurants in malls, on high streets and highways, in neighbourhoods, and at airports. It is a question of how we prioritise. Obviously, we have our revenue estimation model, which helps us decide where we want to open first. There are multiple lenses of looking at it.
Going forward, we are going to open the majority of stores in the South without compromising on the leadership position we have in the West. So, you will see a restaurant come up in every place, including highways.
And airports?
Absolutely. We have been able to open four restaurants at the Mumbai airport …one at the domestic terminal and 3 at the international. We believe we can do this in other airports too.
In fact, we now have two restaurants in the vicinity of Hyderabad Airport, providing convenient access and quick dining options for travellers.
Very recently, we also opened two of our newest ‘oil-alliance’ Drive-Thru stores in the Bharat Petroleum Corporation Ltd. (BPCL) wayside amenities on the Delhi-Mumbai Super Expressway in Goriyad and Sarawani near Vadodara Gujarat.
McDonald’s India and globally is committed to staying relevant and accessible to where customers are. With new transportation hubs like highways and airports continuing to develop, new opportunities will emerge across India.
Which transit hub performs better for you—airports, highways, metro stations?
McDonald’s India has built a strong presence across a variety of trade areas including transit. All of our locations age well especially. Transit highways as habits build over time, most of our long-standing locations including those in transit environments, have performed well for us.
Being a leader, we will continue to capitalize on these new transit-oriented opportunities and will continue to explore opportunities to open more restaurants in all relevant transit-focused settings.
You had said your focus is going to be on the South. Can you elaborate on the cities you have prioritised in the region?
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.
We see potential in the Tier 2 cities of South India and will be accelerating our growth in the area.
Which new formats will you open more?
The new formats are a part of the continuous improvement at McDonald’s. When we start, we do not change everything overnight. The McCafé journey started in 2015, and Experience of the Future (EOTF) started in 2016. Now, pretty much all our restaurants are EOTF and McCafe.
And you are going to see that the definition of EOTF will change to something else.
If you look at the last couple of years, you will find changes in terms of the store decor compared to stores we opened four years ago and what we are opening now. We are reimaging stores, bringing them up to speed with the newer standards.
Every year, we tweak the standard so that we are not losing out on the opportunity to give the very best to the consumers. We make sure that we are reimaging around 10% of the restaurants every year and opening new restaurants with new standards.
So, we are always renovating, and reinventing ourselves. That’s a continuous journey whether it’s the menu or stores.
What is the overarching thought behind the reinventions?
It is all linked to consumer experience and how consumer habits are evolving. The EOTF initially was about ordering at the kiosk. Today, EOTF has evolved digitally. And you will see a lot of activity around that. So, earning loyalty points digitally has been added recently. And you can earn points as you eat at McDonald’s. For every meal, we started focusing on special offers for people who are big deal seekers. So, we could fragment by way of digital and there will be multiple things which are lined up in this digital journey as India also adopts the global platforms, over the years, you will see a lot of it changing.
On the topic of digital…recently McDonald’s North and East launched AI product development with a chatbot. Are you doing something with AI too?
If that product does well, we will bring it to McDonald’s West and South as well. We are trying to see how we can collaborate with them more closely. And then you will see one India campaign.
