Focus on volumes, even if average ticket size of orders falls: Akshay Jatia

Westlife Foodworld CEO Akshay Jatia says the focus is now on driving volumes, digital adoption and customer frequency as McDonald's targets 600 stores by 2027

Westlife Foodworld is the West and South India franchisee for American multinational fast-food chain McDonald’s. “We are a truly Indian business, while running an American brand,” said Akshay Jatia, chief executive officer of Westlife Foodworld, in a video interview with Surajeet Das Gupta. Jatia spoke about plans for growth, shifting to digital services and getting Indians to visit restaurants more often. Edited excerpts:

 

You have already built 450 McDonald’s outlets in West and South India. What are you focusing on now?

 

We continue to open 50 to 60 restaurants every, and our goal is to be at close to 600 restaurants by 2027. Our focus is on increasing volumes and growth. We have done 150 million plus orders in three years, so we are looking at acquiring new customers and increasing their frequency in visiting our stores. Currently, the average repeat visits is twice a month. We want this to become once a week, which is the norm for any outlet that is doing very well in the globe. It is a tough task in India, considering the low level of eating out and a culture of people liking to eat at home. In the market, you have a lot of fragmented and unorganised competition. But we will be there.

 

How has digital and online delivery worked for McDonald’s?

 

As much as 70-75 per cent of our sales come from digital, which includes our kiosks in outlets, online aggregators as well as our own delivery app. Digital allows us to understand customers better and give them more personalised choices. We are also scaling up our own delivery app and piloting a 20-minute delivery.

 

We believe online helps offline, as we understand the customer better. While offline sales currently account for 59 per cent of sales (through digital or cash counters in restaurants), 41 per cent is through off premise orders. In many stores digital kiosk orders have become 50 per cent of sales.

 

How do you ensure that sales increase and people visit you more often? Do you have a strategy to get new customers?

 

Yes, we recently rolled out a proposition in West India where you get a three-piece meal (burger, fries and a beverage ) for Rs 99. We are very confident that this is an extremely powerful lever because it’s filling; it’s a great price point and it’s a very relatable set of products. On top of that, we have propositions where you will get one of our large burgers and two other pieces for under Rs 200 rupees. We also have coffee at a great entry-level price point. There’s value over there too — it’s a handcrafted cup of coffee made by a barista trained in our outlets.

 

Will chasing volumes and growth reduce your ticket size per order?

 

We need to drive volume. Ticket size may come down a little bit but we have so many propositions in our restaurants that we can trade them up. For instance, we offer for Rs 25 a 5 gram protein slice which is healthy and nutritious and that you can add on or the millet bun which we developed with CFTRI (Central Food Technological Research Institute). We have enough tools to protect our ticket size. But the name of the game right now to be very clear and transparent is driving volumes and driving growth.

 

How local is McDonald’s?

 

In terms of menu, we are almost all local. There’s nothing that we really import — maybe the fish patty but the volumes are so low that we don’t offer it across all our restaurants. The supply chain is local: Whether it’s the French fries in Mehsana made by McCain, which also supplies them to McDonald’s licensees across the world; whether it's chicken that we get from Godrej and Venky’s and process them at our plants. As much as 90 per cent of our menu has actually been formalised and created by our team in India. We are a truly Indian business, while running an American brand.

 

A growing demand amongst health-conscious Indians is to have transparency in declaring the calories in the food. What is your take on this?

 

We already have it on our online delivery app and we are working on how we can also incorporate it in the menu board.