Big Bite

Mumbai, July 6: Fast-food giant McDonald’s is on an expansion spree.

The company, which currently has about 110 food joints in India, will invest about Rs 500 crore to double its number of restaurants by the end of 2008.

“We serve more than 2.5 million customers every month. We are planning to have a chain of 150 restaurants by the year-end. We will further increase the number to about 220 by the end of 2008,” Amit Jatia, managing director of Hardcastle Restaurants, told The Telegraph.

McDonald’s Corporation has 50-50 joint venture partnerships with two Indian outfits: Amit Jatia’s Hardcastle Restaurants and Vikram Bakshi’s Connaught Plaza Restaurants. Jatia has the franchise for the west while Bakshi runs the show in the north.

The company is popular among the youth for its low-priced food products, which has sustained successfully over the past few years in India. Jatia said about 62 per cent of the customers are below 30 years.

On whether McDonald’s would be able to hold down prices, Jatia said, “Supply chain management plays a vital role in controlling prices and margins as a significant amount of expense is involved in the supply of raw materials. We have set our margins strategically at a high level on these low-price food items so that they are not affected much in the long run.”

Jatia said the cost of opening a new restaurant is about Rs 3 crore, and the company, which is currently spread across 29 cities in India, will be entering a couple of new cities this year, including Chennai.

“We plan to add eight to 10 more restaurants in Mumbai this year,” Jatia added.