In an interview, Amit Jatia, Vice Chairman, Westlife Development, underlines the strategy formulated for Indian market and how it constantly undergoes change
If I compare the same store sales which we have got from Jubilant Food Works which is a pizza company versus Westlife which is a burger company, it looks like Indians are eating more burgers than pizzas?
Well it is more to do with sort of our strategy and I have always maintained that we have been pretty consistent with the way we sort of developed the Indian market for the consumer. Obviously in an economy there are ups and downs but when the economy was a bit under pressure over the last three years I think we took really bold moves and that has probably yielded in a bit of a differentiation within the industry. So first and foremost you know rather than focussing on deep discounting to bring customers in we actually spent a lot of capital in re-imaging our restaurants and adding McCafé. And McCafé as worked really well for us because it added a new occasion for the consumer to use McDonalds and essentially this is Barista made coffee and other beverages and as the beverage market generically was taking off I think our timing and particularly the execution has worked really well for us. Second thing that really worked for us was delivers. So given that we established the delivery platform in 2005 consumers were reasonable aware of the fact that McDonald delivers. In 2014 we launched the new web platform and along with that the new app and then business just really took off. So in two years we have grown our delivery business by over 60% and more than 45% of our business now is coming through web and the app. Lastly, you know another thing that we are really proud of is brand and menu advertising. I think if you look at the menu today versus three years ago I feel far more confident on the menu and its resonation with our customers, with the McSpicy chicken, with the fries, with the Peri Peri and most recently the Mexican cheesy fries as well. So I think these steps have really differentiated us and if you look at FY17 actually we were 4% same store sales growth, especially in a category which was kind of stagnant in the last couple of years. So I think you know it has worked for us quite well and we have reset the foundation for our growth so we are quite excited about where we are heading.
If I look at the product offering and the proposition, you know the McDonald’s burger is a healthy cheap and affordable proposition, at a time when the Indian palettes are changing some would argue that if ordinary categories can grow in double digit why dining experience like McDonald’s with the delivery included is still struggling to grow in double digit?
We are double digit, if you look at total sales growth it is 12% for the last year and we continue to sort of do quite well in the quarters that we are in and is coming as well. I think you got to factor that the entire eating out frequency has become flat for the last two to three years and because eating out is delivered on impulse if the retail footfalls take a beating, if people are not going say out to shop it impacts eating out business immediately. So I do not think it has to do with McDonald’s or it has to do with anything else. In fact in a very difficult environment the fact that we have grown double digit and the fact that we have grown 4% same store sales growth is fantastic because if you look at the previous period over the last– between 2004 and 2013 we doubled the same store sales, that means if a restaurant was doing Rs 100 in 2004 that same restaurant was doing almost Rs 200. I think that is absolutely fantastic growth. And if you were to underlie why that happened it was primarily built around the frequency of eating out. So I am very-very certain that economies will have their ups and downs and as the consumer sentiment is coming back you will continuously see, in fact entire eating out business sort of take off and I am quite confident of that coming forward. The other thing is if you look at the menu, you know, we have a range of products it is not just that McDonald’s has value products, if fact our value burgers only do a small part of the business. In the last two to three years we have introduced the new Maharaja Mac both veggie and nonveg, we have introduced the spicy chicken and we have done many flavours around the spicy chicken. All of that has resonated really well with the consumer. The breakfast menu where we have done the dosa masala burger that has also really connected well. The masala omelette, now all of these egg products are very-very healthy, high in protein, they are basically steam products so obviously we are evolving with the changing needs of the consumer and any consumer business needs to do that to stay ahead. So I am quite confident about where we are and I am quite confident that in a difficult environment I think we have handled ourselves quite well and as the tailwinds in the economy turn you will see our business turn with that.
Everyone is just so caught up talking about GST and how GST is going to change their life. The tax has been fixed at 18% for AC restaurants and I understand that that is mildly higher for you. Do you sense that that could impact your business in any which way?