McDonald’s is planning to add 18 more eateries by the end of financial year 2010 in the north and eastern regions of India. The company plans to invest Rs 150 crore over the next two years in its expansion, out of which Rs 54 crore will be pumped in this year. The company is entering some new cities such as Jodhpur, Kota and Patiala, among others.
“We are shy of entering malls because we don’t know if they will succeed or not. We are careful when it comes to opening a store in a mall. The latest one we have added is at the old Delhi station,” said Vikram Bakshi, managing director, McDonald’s India.
The new stores will be opened on the revenue-sharing model. The company at present has 163 eateries in India out of which 87 outlets are in the North and East regions. The company has seen a growth of 30 per cent last year and hopes to continue on the same momentum this year as well.
The company has extended the testing period for its breakfast menu by an additional six months, while plant are underway to launch the menu across all outlets by mid-2010. “We wanted to be sure that our processes are in place and that we can manage quality with consistency before we launch it across our outlets. We have got a good customer response, so we will definitely launch this product,” he added.
McDonald’s recently introduced a premium product –chicken nuggets, and encouraged by the response the item is here to stay on the menu. “The demand for chicken nuggets has been beyond our expectations and we are struggling to match our supply at present. Chicken nuggets have contributed 15 per cent to our overall sales as against our expectation of just 8 per cent,” Bakshi said.
The company is promoting this product through its campaigns and plans to launch a series of campaigns on branded affordability soon. About 8 per cent of the total revenue of McDonald’s goes into advertising. The creative agency for the company is Leo Burnett. Bakshi said the advertising budget has been growing alongside revenue growth.
The company has recently increased the price of its aloo tikki burger from Rs 20 to Rs 25. “We changed its price after five years and also because we did not increase our prices when the slowdown was driving down the market. Now that the market is recovering, we thought we can increase the price,” he said. Bakshi added that there won’t be anymore price increase for any of McDonald’s products.