McDonald’s stores close: Westlife Development shares gain over 2%

Going with reports, Westlife Development is the frontrunner to get the rights to operate the American burger chain McDonald’s restaurants in north and east India. NSEBSEWestlife DevelopmentLoading data…

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    ChartsValuation & Peer ComparisonCommunity BuzzPEER COMPANIES Shares of Westlife Development gained over 2 per cent in early trade on Wednesday after McDonald’s has said that Connaught Plaza Restaurants Ltd (CPRL) will not be authorised to use its brand name and trademark starting September 6, implying that 169 stores of the burger-and fries brand face closure across the entire north and east region from Wednesday.

    Going with reports, Westlife Development is the frontrunner to get the rights to operate the American burger chain McDonald’s restaurants in north and east India. The company already operates the McDonald’s outlets in south and west India

    The scrip was trading 2.52 per cent up at Rs 250.45 around 11 am (IST). On the other hand, benchmark BSE Sensex was down 164 points, or 0.52 per cent, at 31,645 at around the same time.

    According to Nirmal Bang Securities, Westlife Development has posted improved performance with 4 per cent same store sales growth or SSG and 11.7 per cent overall sales growth, although FY17 was a challenging year for the overall quick service restaurant or QSR industry. The company rejuvenated the customer- facing part of its business with the objective of enhancing footfalls. It witnessed increase in footfalls (200mn) by 8 per cent in FY17 as against 3 per cent in the past couple of years.

    The company also enjoys certain competitive advantages like long-term rent agreements with a longer tenure for acceleration on relative basis which leads to faster store breakeven periods. Also, the company sources as much as 99 per cent of its ingredients directly from farmers under close supervision, ensuring highest quality. Also, the company has an extensive menu that has something from everyone ie products starting from Rs 17 to a full-fledged meal costing above Rs 100.

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