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Menu innovation, cost optimisation paid off: Amit Jatia, vice-chairman, Westlife Development



Westlife Development BSE -5.46 %, the master franchisee of McDonald’s in west and south India, on Monday reported strong numbers for the October-December ’17 quarter, indicating a clear turnaround in the eating out sector. The restaurant chain reported net profit of Rs 7.75 crore for the quarter ended December 2017, against a net loss of Rs 1.71 crore during the corresponding year-ago period. Westlife Development vice-chairman Amit Jatia told ET in an interview that multiple factors contributed to growth and that the sector is now cautiously optimistic on growth.

What do you attribute the numbers to?

Our focus on multiple platforms has paid off. We have done no discounting or weekly offers, or other promotions. Instead we have developed the menu with a dozen product innovations, re-imaged stores, displayed calories prominently so consumers can make informed choices, and given healthy options. We have, for example, whole wheat wraps, hot chocolate options with happy meals, no artificial ingredients, and so on. All this, along with tie ups with key aggregators and payment networks is collectively yielding results for us.

What is the consumption outlook for the next two quarters?

Consumption is coming back. We have the right tailwinds for growth. I would say there is cautious optimism within the sector now. We say this on the back of our tenth straight quarter of positive same store sales growth. These are record numbers with double digit comparable sales growth of 20.7%, the highest in the QSR space.

Have you revised your store guidance?

We will grow consistently. By 2022, we plan to have up to 500 stores in the West and South. The October-December quarter saw nine new stores and five new McCafes.

How much have cost optimisation measures contributed to your numbers?

Optimisation of crew and utility costs have led to healthy operating leverage to the P&L. Savings on our new restaurant operating platform have been significant and resulted in stores being able to break-even earlier and improve profitability.

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