McDonald's ups the ante in QSR

Launches next-generation restaurants, targeted at the digitally savvy

Fast-food major McDonald's has stepped up its game, launching what it calls "next-generation" restaurants in India, as the pressure to reinvent itself grows in a competitive market.

Westlife Development, which runs McDonald's restaurants in the west and south of India, will make available everything from digital kiosks for smooth ordering to digital menu display boards, free wi-fi for those wanting to be connected to the Net, gaming zones, and cell phone charging points as consumers increasingly demand convenience at fast-food joints.

Westlife will also introduce table service at these "next-generation" stores, in a departure from the principle of self-service that has characterised McDonald's restaurants across the globe.

The format, says Amit Jatia, vice-chairman, Westlife Development, was introduced in the US a few months and has subsequently been unveiled in different parts of the world. In India, the first such store was launched on Thursday in Mumbai, with plans to convert a quarter of McDonald's 250 stores in the west and south of India to the new format. This, Jatia says, will happen over the next three to four years as the company gears up for the future.

"What we are staring at is the interplay of technology and fast-food. The format that we have in place is innovative and intended to make the experience of being at a McDonald's restaurant pleasurable. The consumer can also end up doing a number of things, such as ordering from the kiosk or ordering via the app on his or her phone, so that he or she can save time. For those who can't make it to the restaurant, our delivery model is anyway in place to take orders," Jatia says.

These next-generation restaurants will cost Westlife money, with the investment per store expected to shoot up almost 10-15 per cent. Currently, Westlife ends up spending Rs 2.5-2.7 crore for setting up a regular restaurant. While Jatia declined to indicate the precise increase in revenue at these next-gen stores, he did say that the revenue growth would be enough to offset the cost comfortably. Analysts, however, estimate the increase in revenue could be at least 15-20 per cent higher than the revenue from regular stores.

Westlife has also padded up the McDonald's menu, introducing soups and salads, which analysts are interpreting as a bid to beef up its healthy offerings during lunch. In January, McDonald's had revamped its breakfast menu, giving it both an Indian and healthy twist.

To be sure, McDonald's has been playing the health card for a few years now as Indian consumers increasingly become conscious of their well-being. "Since June 2013, McDonald’s has reduced sodium across its sauces and buns by 10 per cent and fries by 20 per cent. So far, we've taken 18,000 kg of salt off our menu," Jatia had said in an earlier conversation. The brand had also reduced the oil content in mayonnaise, bringing it down to a quarter from 67 per cent before, he said.