Takeaway from this burger giant's comeback story

Even though the QSR (quick service restaurant) space is currently grappling with high inflation, waning post-Covid demand and competition from regional players, Westlife Foodworld - the operator of McDonald's franchises in Southern and Western India - remains resilient. Burger joints stand tall Westlife has posted the most resilient performance in the first nine months of FY24, compared to established peers Company YoY revenue growth (%) YoY operating profit growth (%) Sapphire Foods India (Pizza Hut & KFC) 15.0 -13.0 Devyani International (Pizza Hut & KFC) 12.0 -29.0 Jubilant FoodWorks (Domino's) 5.0 -26.0 Restaurant Brands Asia* (Burger King) 19.0 11.0 Westlife Foodworld (McDonald's) 14.0 -7.0 *The company witnessed a decrease in losses (at both operating and net level). Westlife Foodworld: Once bitten Westlife, operating in India since 1996, hasn't always been immune to weakening demand. Back in FY13, the company's financials were hammered by rising inflation, weak consumer sentiment, and, consequently, lower footfalls on high streets and malls. These resulted in lower output from its stores and turned the company operationally loss-making. However, the company embarked on a strategic turnaround in 2016. It executed various strategies to revive its flagging business by reimagining store layouts, introducing new products and making off-premises sales. Below are the strategic initiatives it undertook: McCafe revolution: Inspired by its global success, Westlife introduced McCafe in India in 2013. It is a premium (and a higher-margin) beverage brand, offering speciality coffee, ranging from cappuccino, latté, iced mocha to frappe, among others. In addition, the company also added a variety of desserts to its menu, further increasing its high-margin product portfolio. This move diversified its menu and attracted new customers. Further, it helped increase the share of desserts and beverages (including McCafe) in total revenue from 11 per cent in FY14 to 27 per cent in FY23. In terms of operational efficiency, McCafe delivers around 12 per cent of a store's sales while requiring just 5 per cent of a store's capex. Embracing digital: The r