In continuation with our last post on Domino’s in India (Jubilant Foods) where same store sales growth has been falling, we’ve been asked about how the situation is with McDonalds.
We only have figures of Westlife Development which owns the McD master franchise for South and West India (as a subsidiary, Hardcastle Restaurants). Even there they have only one store in Andhra Pradesh (remember, Hyderabad is in Telangana) and one in Goa, both of which are recent.
The same store sales growth is abysmal in general – even at +3% in the recent quarter the sales growth figure has seen major dips in recent times. A rough analysis of this tells us that in absolute terms, same store sales for Hardcastle haven’t grown in three years.
The problem? They don’t seem to make any money. Westlife seems to just run losses in comparison, and that’s not exciting.
Overall, McDonald’s seems to be doing more things than Domino’s in India. They have a McCafe (which serves pretty good coffee, I must admit) series, and they keep getting these little toys as merchandise along with their kiddie meals which is super-attractive for children. Their prices are very affordable too, and now they’re even open for breakfast. However, the lack of profit is a big negative.
Even with brand recall at the kid level, and possibly higher footfalls (in-store dining) the business doesn’t seem to be able to turn a profit. There is possibly the impact of startup competition here too – however, the higher in-store dining, and their kid-attractions will keep their sales more immune to such competition.