Slowdown may have affected consumer spending, but it’s an opportunity to expand
aggressively, Vikram Bakshi, MD for north and east markets, McDonald’s India, told Nupur Anand. Excerpts from an interview:
Restaurants are reeling under lower consumer spending...
Yes, consumption’s slowed... Over the years, we got used to growing at high double-digit same-store sales growth which peaked at 20%. Now the scenario is completely different. The same-store sales growth has come down to single digits. We are growing at high single digits and it’s after 6-7 years that growth at McDonald’s has slipped to single digits.
When is this downtrend expected to change?
I believe this year will continue to be tough and challenging. Only from next year we can expect consumer confidence to start improving.
Will you take this slowdown opportunity to expand?
Yes, absolutely. We’re looking at aggressive expansion. I believe that slowdown is a great time to expand as real estate is available easily and so are other resources. Our plan is to double the number of our restaurants in the next three years. Remember, it’s a big call. We want to double what we’ve done in the last 15 years.
How many stores will you be adding this year?
In our region (north and east), we grew by 125% over the year before, in terms of store opening. We’re hoping to double that again this year. So, if we opened 27 stores last year, we are hoping to double the number this year.
Is the focus on metros or non-metros?
We are taking a balanced approach and are looking at expanding across, so both metros and non-metros will be covered. And in between this, we’re also populating the highways.
What is new on the menu?
For us, it’s not just about introducing one great product but filling in the gaps in the exciting menu. So, additions will keep on happening
For this, is the focus going to be on localisation?
Not necessarily. Last year, we brought a lot of core products such as chicken nuggets, McFlurry... so it’s going to be a balanced approach.
You also had plans to open a vegetarian outlet...
Yes, that plan is going on, but I can’t divulge details now. And once we see what happens with the first one, then we’ll take it forward.
Is there any price increase in the offing?
Well, knowing that we’re a mass-market player, we’re very conscious that we don’t raise prices for the heck of it but because we’re feeling the inflationary pressure and margins are getting hurt. But whenever we take it, it (the decision to raise prices) will be a cautious one.