Although it may seem a little counterproductive, international chain restaurants in India like McDonald’s, Burger King and Dunkin Donuts are adding more expensive items to their menus to increase sales at their stores. After years of catering to the public with low-cost menu options, restaurants are adding premium products to entice its customers to spend their money at their outlets.
McDonald’s Raises The Bar
The recent launch of McDonald’s Maharaja Mac priced at Rs 145 makes it one of the highest priced items in the menu. It goes directly against the principle of mass-appealing prices which McDonald’s used to build its customer base in India since its launch 20 years ago. Speaking to Economic Times regarding the new high-priced menu, Smita Jatia, Managing Director of Hardcastle Restaurants, a frachisee of McDonald’s India, said, “While a decade back western fast food was nascent, now the need has changed from trial to indulgence. Consumers want customisation and personalisation.”
Although high-priced menus usually proves to be a detriment to sales, an internal study conducted by McDonald’s notes the opposite. The study concluded that consumers are more than willing to pay significant higher prices as long they are considered “premium”. McDonald’s also stated that there was a significant jump of over 10% in sales of its premium products from 2012 to 2015.
More To Follow
The crowded marketplace for quick service restaurants (QSR) has lead to an increase in premium priced offerings. Jubilant FoodWorks, which operates Dunkin’ Donuts and Domino’s Pizza in India, has also launched its own premium products under both restaurants. Dunkin’ Donuts is introducing specialised coffees like ‘Tough Guy’ cappuccino and ‘Therapeutic’ cappuccino, while Domino’s Pizza has partnered with world famous Chef Vikas Khanna to launch European-styled pizzas priced at over Rs. 250.
Beer On Tap?
Quick service restaurants have also been about appealing to the mass but recently with an increase in disposable income from working professionals in the metros, these restaurants are aiming for much more premium products to satisfy the demand. Chain restaurants are also introducing items which are typically not on the menus of fast food restaurants. Wendy’s, which came to India last year, is in talks to introduce beer, wine and premium coffee to their menu. Jasper Reid, Director of the holding companies of Wendy’s and Jamie’s Italian in India, said, “QSR was all about operations. Now, it is going back to being restaurants that offer customised and premium products.”