The latest American fast food chain to enter India isn’t rushing into a madcap expansion. Jasper Reid, Director, Sierra Nevada Restaurants, the master-franchisee of Wendy’s in India explains to Kushan Mitra why this is the case.
At Gurugram’s CyberHub foodmall the crowds are gathering for the evening rush, and many of them are headed to the latest fast-food joint in the area, Wendy’s. America’s third-largest burger chain, Wendy’s was founded by Dave Thomas, a former Army cook and named after his daughter.
One of the founding principles of the chain was to be an ‘old fashioned’ hamburger restuarant and that is evident when one walks into the out-let at CyberHub. Instead of the bright colours and plastic that dominates rival chains, Wendy’s is dominated by woody hues. Britisher Jasper Reid, Director, Sierra Nevada Restaurants and Chief Executive, International Market Management (IMM) Associates, the master-franchisee for Wendy’s in India says that the chain was staying true to Thomas’ principles. “We also do table service. So for almost the same price as our rivals, you get a more refined dining experience. Everybody is doing burgers, but how can you be different.”
And Reid is also following a different growth path compared to his rivals. In the past year, since the chain opened their first outlet in Gurugram, they have only set up four outlets. Three in the Haryana city and one in Noida. This is because Reid, a long-time observer of the Indian food industry, who helped set up Pizza Express in India believes that the industry is yet to emerge from the tough times it has suffered over the past few years, “People’s willingness to spend more has gone south, so you have to entice them in with attractive price points and value.”
This, Reid claims is because disposable incomes have not really increased over the past few years. “Look at the young men here, they may look well-to-do but many of them are paying rent, sup-porting their families back in their smaller towns and saving up for their marriages. They may not have more than Rs. 50 to spare on a meal. The challenge is how do we get that Rs. 50? This is why I feel that a place like `Chaipoine has been so successful because someone can have a cup of tea and a egg puff for Rs. 50. This is our constant challenge, but I do feel that the economy is doing slightly better now.” In fact, Reid believes that the entire ‘Quick Service Restaurant’ model has been questioned in India over the past few years. “One of the problems is the term QSR, would you want to eat in a QSR.
The other problem is that I feel QSR restaurants have focussed so much on their processes at the cost of their food items and the way they treat their customers”; Reid says. Reid points out that Wendy’s does not have sig-nificantly higher costs due to their decor, in fact costs are “less” than those of their rivals. In addition, Wendy’s in India has started offering bacon (pork) on their burg-ers, “I do not believe this alienates customers, in fact I feel that younger Indians want to try different things at good quality price points.” Yet, he does point out that the competition is growing far ahead of the market.
“There are some advantages to this, firstly there is a wealth of ingredients available in the market now, and I feel that there will eventually be a huge industry making kitchen equipment in India soon. That will really be a big `Make In India’ play, because why should such equipment be imported?”
In addition to Wendy’s, Reid, through IMM is also the franchisee for British Chef Jamie Oliver’s chain in India. Jamie’s Kitchen and Jamie’s Pizzeria have also been opened in India, with the full-service Jamie’s Kitchen in Delhi and a Pizzeria each in Gurugram and Noida.
“In fact, we will be opening our first outlet in south Mumbai soon.” Yet, Reid who teases about an upcoming visit by the celebrity British chef also says that he is no hurry to expand either the American or British chain. “Same-store sales are stalling, Burger King did a rapid expansion of 50 sites in 18 months, I do not think we want to go down the same route. \We want to see how customers respond to our offerings before expanding”, he points out, adding that the past weekend where he waited on tables the CyberHub outlet served 1700 customers. “I think we are becoming a place where customers want to come despite the immense choice they have in an area like Cyber Hub with over 50 eating options.”
