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Month: April 2013

Retail Brands

How McDonalds India beats Inflation & Keeps Customers Happy ?

McDonalds India Happy CustomersIn our last review we have already highlighted India’s best supply chain management system of McDonalds beating Reliance Retail and others in the way. Today we’d like to point out on what business strategies McDonalds has adopted to beat the Inflation unacceptably high under the Corrupt Congress Government.

Transformation of agriculture practices: Mechanized field preparation and Drip irrigation were implemented on product farms which has lowered wastage and improved yields consistently. Eg: Farm yields for iceberg lettuce have improved from 60% to 80% while processing yields have improved to 75% from 45% earlier. (more…)

News & Views

How Does McDonalds Manage its Supply Chain in India ?

McDonalds IndiaMcDonald’s supply chain facilities include the chicken patty plant (Vista Processed Food Pvt. Ltd.), cold chain distribution center (Radhakrishna industries) and over a dozen vendors and suppliers. We present insights on the close interdependence between key vendors and McDonald’s, which is a long term competitive advantage, complex supply chain which is vital to support its growth acceleration phase, and ability to manage inflation through transformation of agricultural practices and supply chain optimization.

McDonald’s offers its key suppliers long term sustainable and profitable growth. The backbone of McDonald’s operations is built on a unique farm-to-fresh cold supply chain. McDonald’s Corp (US) itself invested Rs 4.5 bn to develop the supply base which took (more…)

Retail Research

Competition & Expansion in the QSR Chain market in India

Competition in QSR In IndiaJubilant Foodworks master Franchisee for Dominos and Dunkin Donuts has ambitious expansion plans to open over 100 stores per year, taking the total estimated store count to 800 stores by FY15. At the same time big players like McDonalds, Yum Brands, Subway, CCD, and other smaller and regional players also have similar expansion plans. Also, many new entrants are expected to enter this business in the coming few years.

Yum Brands (YUM US) has outlined (more…)

Retail Research

Opportunities for QRSs Chains in India

Quick service Restaurants in IndiaBeyond Doubt, Indians are foodies, and thus the opportunity for the organized Quick Service Restaurant (QSR) space (especially those with middle-of-pyramid pricing) is unlimited. Economic slowdown will pose hurdles, but nevertheless we expect Indian QSR industry growth of 20-25% over FY13-23, significantly above that of overall consumption and the peer group (apparel, retailing and packaged food).

Our discussion with multiple QSR format owners and (more…)

News & Views

Reliance Retail – Good Performance by Loyalty Club Members

Reliance Trends ShoppingReliance Retail added 184 stores over FY13, taking its total store count to 1,466. Total space as of end-FY13 was 9mn sqft across 129 cities. The fashion & lifestyle segment witnessed the highest store additions, followed by electronics.

Store additions for value formats were relatively low. Retail space is concentrated more in the south (40% share of retail space) and west (33% share), followed by the north at 19% and the east at 8%.

Reliance Retail posted relatively (more…)

Retail Research

Titan Vs Tribhovandas Bhimji Zaveri vs PC Jewellers

Business - Jewellery RetailingTitan’s Jewelry division registered 27% y/y sales growth with grammage growth of 12%. Sales growth was driven by festive / wedding sales, restocking by franchisees and favorable base. Retail sales growth was however lower at 19% y/y.The Mgmt noted that jewelry sales have seen some moderation in the month of January. Share of studded jewelry was lower at 22% on account of weak discretionary demand for diamond jewelry.

Tribhovandas Bhimji Zaveri (TBZ)witnessed strong demand during (more…)

News & Views

How Government of India is Taking a Slice of Your Pizza ?

Service Tax on PizzasDominos has increased prices by 4.9% to pass on the impact of service tax applied by the Congress led UPA Government from 1st of April. However there is still some confusion whether the service tax (paid for the ambiance, service in the restaurant etc) is applicable on home delivery orders. We believe that from the tax authority’s perspective, if such a distinction is made between home delivery and Dine-in orders, it will be extremely difficult to enforce the law and hence we have assumed that the tax is applicable for both, home delivery and Dine-in, for good. (more…)