Burgers vs COVID-19! McDonald's sales back at 70% of pre-pandemic level

When India announced a complete lockdown this March to fight the Coronavirus pandemic, Westlife Development, which owns the McDonald's franchise for West and South also found its business coming to a complete halt. Amit Jatia, Vice-Chairman, Westlife Development, says that the black swan event gave him an opportunity to reinvent. Through the lockdown, Jatia says that he and his team worked hard in building their omni-channel business model. They came up with concepts such as 'on-the-go', which allowed a customer to place her order on the app and the order would be delivered to her car. The company also bolstered its other offerings such as home-delivery and drive-thru on its app. Even as the unlock process began, restaurants, especially in Maharashtra (150 restaurants in Maharashtra), were not operational, and Jatia claims that it is these 'convenience' formats which helped the fast-food major to bounce back on the road to recovery.              

The burger franchisee claims that it is almost 70 per cent of pre-COVID sales. In Q2FY21 it has recorded a growth of 47.6 per cent growth over Q2FY20. "Businesses which look through the lens of optimism even during difficult times win. Through the lockdown, our focus was to future-proof our business by building our omni-channel model and that has borne fruits," points out Jatia. Its convenience formats (on-the-go, delivery and drive-through) which contributed close to 50 per cent of its revenue pre-COVID has contributed close to 70 per cent in Q2FY21. Will convenience continue to rule over dine-in? Jatia is hopeful that footfalls at dine-ins would be back soon and the business will be back to the earlier 50:50 ratio. "One of the learnings from McDonald's operations in other countries which opened up earlier than India was to be patient with dine-in. It took four-six weeks for the consumer confidence to build in and till it did, one had to do everything to convince consumers that McDonald's is the safest. We have put together 42 safety protocols for our employees and customers," he says.

Jatia says that the sales recovery was also due to the company's strong cost management. From supply chain, operations, rent negotiations to corporate office cost structures, the McDonald's franchisee has taken a host of cost rationalisation steps. "This helped improve margins and operating EBITDA significantly with the company achieving break-even operating EBIDTA in September 2020. Cost management is part of our DNA and we have managed costs without laying off a single employee," Jatia points out. He says that the company's diversified real estate portfolio has also helped in fighting the crisis more effectively. "If we had more restaurants in malls, which took the longest to open, our results wouldn't have been as good. Our strong presence on high-street and drive-in has put us in a better position," he further explains.      

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