Connaught Plaza Restaurants Pvt Ltd (CPRL), the master franchiser for McDonald’s restaurants in India for the north and east regions, plans to invest up to $150 million, or ₹1,280 crore, in the next three to four years to expand its retail reach.
The company plans to scale up to 300 outlets by the end of this year from its existing 245 units and then double it in the next three to four years from there, Anant Agarwal, vice-chairman, MMG Group and CPRL, said.
Moreover, CPRL, part of the ₹1.2-billion MMG group, is also expanding McCafe, the in-restaurant café brand of McDonald’s, from its 125 outlets to 200 by the end of this year.
The group, which acquired CPRL in 2020 following a bitter tussle between the Chicago-based QSR (quick service restaurant) major and its former Indian partner Vikram Bakshi, is modernising the existing stores. It also plans to tap into the opportunities in the small emerging tier III and below cluster areas with smaller-format stores, said Agarwal.
“We have opened a few stores in new states and cities such as Gangtok (Sikkim), Siliguri (Bengal) and Guwahati (Assam). We see these regions as very promising,” he said, adding that people had queued up in these small markets.
“They are aware of the brand and have been waiting for it to come.”
He argued that north and east were under-penetrated and hence CPRL will not only open new stores at Delhi NCR and existing big markets of Punjab and UP but also go to new tier III cities.
Commenting on investments, Agarwal said CRPL will invest $100-150 million to open new stores and modernise a few of the older ones. All the upcoming stores will be operated by CPRL.
In the hinterland, McDonald’s will also consider smaller format stores against its existing 3,000 square feet ones.
“There is a demand for smaller formats. We are constantly working on it. We aspire to be able to manage a store within 1,800-2,000 square feet. That is something we would want to, maybe in the next one to two years,” he said.
At present, 65 per cent of sales from McDonald’s stores come from dine-in on an average, and delivery contributes approximately 35 per cent.
The company expects this ratio to remain as McDonald’s is mainly a family
restaurant, hence it also requires a larger area to operate than rival QSR chains.
On McCafe, Agarwal said it’s one of the most promising channels of sales with the growing cafe culture in the country with the millennial’s preference for coffee.
When asked whether CPRL plans standalone stores of McCafe, Agarwal said: “No, not at the moment. I think right now we feel McCafe as a store extension works very well.”
“The idea would be to double down on this number. So by this year, we will end with 200-plus McCafes. So, ultimately, the idea is to have a McCafe in every store that we operate. So if we have 500 stores tomorrow, I will have close to 500 McCafes,” he said.
McDonald’s QSRs in the south and western region are operated by Westlife Foodworld Ltd, its master franchise for the region.
In the Indian market, McDonald’s competes with both international and local players. Major international competitors include Burger King, Subway, KFC and Pizza Hut.
