McDonald's India franchisee Westlife posts 56% profit jump on discount-driven demand

Westlife Foodworld, which operates McDonald’s restaurants in west and south India, reported a 56% rise in quarterly profit on Thursday on steady demand for discounted meals.

Global fast-food chains have been doubling down on discounts and cheaper menu offerings to attract budget-conscious customers as competition in the fast-food segment remains strong.

During the quarter, McDonald’s promoted its McSavers+ offer, selling a burger and a drink for 69 Indian rupees.

Consolidated net profit rose to 23.8 million Indian rupees.

Westlife’s same-store sales rose 1.5% in the fourth quarter ended March 31, while the addition of 21 new stores helped up drive revenue from operations by 9% to 6.55 billion rupees ($69.50 million).

The company had opened 18 new stores in the year-ago quarter.

A commercial cooking gas shortage triggered by the Middle East war has pushed costs up for Indian restaurants.

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This, in addition to the heavy discounting, pushed up total expenses 8.3% in the quarter to 6.63 billion rupees.

However, Westlife said the impact was mitigated by “supply chain efficiencies, proactive sourcing strategies and cost optimisation”, without providing further details.

Analysts have said fast-food groups, including Westlife and its rivals including KFC operators Sapphire Foods and Devyani International, are relatively insulated due to their greater use of electric equipment.