Burger King India clinched 66% sales growth in FY2019 due to “focused” expansion: analyst
A localised menu and ‘prudent pricing’ also helped the fast food giant.
A focused yet aggressive expansion strategy played a key role for Burger King India’s 66% sales growth in FY2019, according to data and analytics company GlobalData.
“Right from the time when the US chain opened its first outlet in November 2014 in Delhi, it took utmost care in its store locations, localization of menu including vegetarian options and pricing of food items to gain the competitive edge,” consumer insights analyst Shagun Sachdeva explained.
GlobalData says the QSR segment in India reached US$45bn in 2018 and is forecasted to reach US$63bn in 2023 at a 7% compound annual growth rate (CAGR).
Whilst the market is “very fragmented”, with smaller chains holding 97% of value share in 2018, the company cites a “growing inclination” in the country towards branded chains, making it lucrative for international fast food restaurant brands.
Burger King currently has over 200 restaurants across 50 cities in India. Comparing it with McDonald’s 400-plus stores in the country, GlobalData says the Whopper-making company “took some time between opening new outlets to understand the consumer responses and tweak the strategies to make them more consumers’ centric.”
It adds that Burger King’s “calculative move” to invest in brand building and addressing “supply chain and operational inefficiencies” is in line with the company’s growing interest in the Indian market.
“What worked in its favor is the right blend of strategies centered on aggressive expansion. Despite a two-year lag, Burger King outperformed its US rival Starbucks in terms of revenue,” Sachdeva said.
