(Reuters) -Westlife Foodworld, the operator of McDonald’s in parts of India, on Wednesday doubled its fourth-quarter profit, helped by cheaper menu items and new restaurant openings.
The restaurant operator’s consolidated profit after tax rose to 15.2 million rupees ($178,163.28) for the quarter ended March 31, from 7.6 million rupees a year ago.
Indian operators of U.S. chains such as KFC and Burger King have launched cheaper items, including a $1 pizza and burger, to compete with local rivals as consumers grapple with high costs of living.
During the quarter, Westlife ramped up advertising for its breakfast options and coffee, which start at a little more than $1. This helped the franchisee report a 7.26% increase in revenue from operations to 6.03 billion rupees
However, the results are in contrast to Pizza Hut franchisee Sapphire Foods . Last week, Sapphire said Pizza Hut’s recovery in India would take longer, after reporting quarterly revenue slightly below estimates.
Westlife’s same-store sales rose 0.7% year-on-year, while it opened 18 new restaurants during the quarter, taking its overall count to 438.
The company, which operates more than 400 McDonald’s restaurants in western and southern India, faces stiff competition from India’s Biggies Burger and Jumboking as well as independent restaurants.
The aggressive expansion, coupled with higher raw material and labour costs, crimped margins. Core profit margin dropped by 50 basis points year-on-year to 13.2%.
Westlife, however, said it expects more people to dine in restaurants as inflation continues to ease. In-store dining makes up more than half of Westlife’s revenue with takeaway and online sales making up the rest.
Westlife’s shares were up 0.2% after the results.
($1 = 85.3150 Indian rupees)
(Reporting by Praveen Paramasivam in Chennai and Shivani Tanna in Bengaluru; Editing by Eileen Soreng)
