Recent headlines have spotlighted Westlife Foodworld, the operator of McDonald's in western and southern India, as the company faces significant challenges. While the company's share price rose approximately 2.7% following the announcement of Akshay Jatia's elevation to CEO, more concerning was the 59% drop in Q3FY25 profit reported in the same period. The company has attributed this substantial decline to increasingly cost-conscious consumers cutting back on discretionary spending amid high food prices. But what does the data actually reveal about McDonald's customers in India? Our exclusive analysis of February 2025 transaction data provides a nuanced picture of this shifting consumer landscape.
Our analysis confirms the company's assessment - Indian consumers are indeed becoming more price-sensitive. The data reveals that 41.1% of repeat customers showed a decreasing spend pattern on subsequent visits, compared to just 33% who increased their spending. The median order value dropped from ₹418 in the first week to ₹399.5 in the second week of February, suggesting consumers are tightening their budgets.
Perhaps most telling is the shift toward budget items. Products priced below ₹100 grew from 33.2% of items ordered in Week 1 to 40.6% by Week 2. Simultaneously, premium items (priced over ₹300) declined from 8.7% to 6.3% of orders by Week 3. The average item price also fell from ₹153.3 to ₹142 during this period - a clear indicator of downtrading behavior.
The data highlights concerning patterns for Westlife's customer retention strategies. A striking 77.1% of customers were one-time visitors during the month, with the average consumer ordering just 1.4 times. This suggests that McDonald's in India may be functioning more as an occasional indulgence rather than a regular dining destination.
Weekend behavior provides additional insights into value-seeking patterns. While weekend orders maintain similar total values to weekday orders (around ₹480), they include more items (3.37 vs. 3.02) at a lower per-item value (₹142.6 vs. ₹159.1). This indicates consumers are strategically maximizing value during weekend visits.
The data shows significant regional variations that might help Westlife target its recovery efforts. Maharashtra and Karnataka drive 41% of orders, with Bangalore and Mumbai alone accounting for 22% of transactions. Interestingly, Uttar Pradesh shows higher average order values (₹529.4) despite fewer orders, suggesting potential opportunity in this market.
Burgers dominate the menu mix, appearing in 80% of orders and constituting 48% of all items purchased. The classic burger-and-fries combination appears in 28% of orders, reinforcing McDonald's core appeal despite economic pressures.
An unexpected finding was the shift in payment methods throughout the month. Bank transfers (typically UPI payments in India) decreased from 59.6% to 49.7% by Week 3, while cash payments increased from 13.1% to 19.4%. This may reflect consumers using cash to better monitor spending - another signal of economic caution.
While our analysis is limited to a single month's data, the patterns align with Westlife's public statements about cost-conscious consumers cutting back on discretionary spending. The new CEO Akshay Jatia faces clear challenges: how to maintain profitability while serving increasingly price-sensitive customers without sacrificing brand equity.
The data suggests potential strategies - optimizing the value proposition of weekend offerings, strengthening loyalty programs to convert one-time visitors to repeat customers, and potentially reconsidering the premium menu mix in favor of more appealing mid-range options. With 66% of orders falling in the ₹200-₹500 range, this "middle market" appears to be Westlife's sweet spot in the current economic climate.
As India's quick-service restaurant sector continues to evolve, Westlife's ability to adapt to these changing consumer behaviors will be crucial to reversing its 59% profit decline and setting the company's 421 restaurants across 67 cities back on a growth trajectory.
