QSR market set for exponential growth in the next few years: Smita Jatia
BW HOTELIER in an exclusive interview with Smita Jatia, Director, Westlife Development, the company that owns and operates McDonald’s restaurants in West and South India, tells us about the recovery trends across their sales graph, increasing demand for Quick Service Restaurants(QSRs), and new trends like ‘eating in a car’.
According to a study by PWC and FICCI, the Indian foodservice market is bound to grow at more than 10% by 2023. How is McDonalds planning to jump in on the growing market for QSRs?
We believe that the pandemic has put QSR players at a position of great advantage and that the QSR market is pegged for exponential growth in the next few years. We have always worked towards anticipating consumer demands and staying ahead of it and we will continue to do that. You will see us evolve every single day to stay relevant to the fast-evolving customer needs. We are on a journey to become a one for all and all for one destination which has relevant offerings across day-parts, formats and for all customer segments. We want McDonald’s to be the destination of choice for people who want great tasting wholesome food, great coffee, great value, accessibility and unparalleled customer experience.
We will lead clutter breaking menu innovations, bring and democratise new international flavours and formats, and continue to improve the ingredient and nutritional profile of our food. At the same time, we will continue to build further on our Golden Guarantee promise, making McDonald’s synonymous with safe and wholesome food. We will also continue to leverage technology to further our omni-channel strategy and provide un-paralleled convenience to our customers. You will also see continuous improvement in customer experience both inside and outside the restaurants.
Revenues have been stronger; the company has reported pre-COVID levels of margins. Efficiency in terms of cost has been seen. What are the major parameters that have led to the reduction in the operating costs?
Fiscal discipline has been a way of life for us. We keep taking redundant costs out of the system on a regular basis and this ensured that we entered the COVID-led crisis with a strong balance sheet. We then took the pandemic as an opportunity to re-engineer our business and further bring down costs wherever possible. As a result, we were able to bring our fixed costs down by 20 per cent. This and the support our partners extended to us helped in improving our operational efficiencies. At the same time, we were able to optimise our variable cost to a large extent by moving a lot of our maintenance and repair work –in-house by training technicians and bringing down our AMC costs. We also worked closely with suppliers to re-engineer our supply chain and distribution cost.
Drive-thru revenues have doubled over pre-COVID period. Once things turn back to normal and seating capacity restraint is removed, how do you plan to keep revenues flowing for the Drive-thru?
McDonald’s has the highest number of drive-thrus in the country and we have been seeing sales from this channel surge ever since markets started reopening. In this pandemic, Drive-thrus became customers’ favourites as they enabled customers to conveniently collect their food without leaving the safety of their cars.
With a surge in road travel and a new trend of ‘eating in car’, we believe drive-thrus have immense potential in the new normal. In fact, we have launched an innovative new service called on-the-go that has converted all our platforms into digital drive-thrus. Using this feature, customers can order from a McDonald’s restaurant of their choice. The restaurant then prepares food basis the customers’ ETA and delivers it right to the customers’ vehicle at a pre-designated pick-up spot at the restaurants. With this, we have created an incremental channel for revenue generation and the customer response so far has been phenomenal.
Technology has played a huge role during this pandemic. How will you continue to make use of technology once things go back to normal?
We have mindfully woven technology across our operations and have invested in creating a strong technology backbone for our company. With this strong technology backbone, we have pioneered various digital and restaurant innovations to make the experience more convenient and enjoyable for our customers.
In this pandemic, using technology, we effectively increased our omni channel presence to make McDonald’s available for customers wherever, whenever and however they wanted to consume it. Going forward, we will continue to leverage technology to drive personalisation for customers and for making the McDonald’s experience more enjoyable, uniform and seamless across platforms.
How have you been keeping up with the growing demand for McDelivery?
We have been investing significantly on our owned app McDelivery to offer great customer experience and value tour delivery customers. At the same time, we have also forged strategic partnerships with third party aggregators to cater to the aggressively growing delivery market.
What are your plans for 2021?
The three key themes of Assurance, Convenience and Value will continue to play a pivotal role in the new normal and for our brand in 2021. We will continue to reinforce trust in brand with our Golden Guarantee program that ensures 42 strict protocols for completely contactless and safe operations across our platforms. You will also see a lot of convenience led initiatives, continued menu innovation and some clutter breaking campaigns to build brand love.
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