Price war begins: Dunkin' Donuts aims to give tough competition to McDonald's and Burger King

NEW DELHI: McDonald’s and Burger King, two of the world’s biggest burger giants, are heading for competition in India from an unlikely rival – American doughnut chain Dunkin’ Donuts. Starting this weekend, Dunkin’ Donuts is triggering a burger price war, offering them at Rs 49 each after selling them at upwards of Rs 129.

India already serves cheapest burgers. While Burger King’s entry-level burgers are priced at Rs 35, McDonald’s sells burgers in India starting at Rs 27. The market has attracted chains such as Fatburger, Johnny Rockets and Carl’s Jr, which are either setting up outlets in India or expanding their presence.

Industry observers say the price cut throws open competition in the sub-Rs 50 category, aimed at shoring up volumes in the eating-out category, where growth has slowed to single digits over the past six quarters.


“The industry is under huge pressure to step up volumes and profitability. Lower prices would lead to consumers downtrading, but may not help in increasing profitability,” said Harminder Sahni, promoter of retail consultancy Wazir Advisors.

Amit Jatia, vice chairman of Hardcastle Restaurants, which operates McDonald’s in the south and west, said, “The base of the market is expected to grow at a faster rate as western fast food becomes more popular among youth and across segments. McDonald’s pioneered the value segment and our experience has shown that value drives frequency of use and as more players of-fer value, the overall eating-out market will grow faster."

Dunkin’ Donuts has a new range called the Crunchy Joe with Tex-Mex flavours. The vegetarian and non-vegetarian variants are priced at Rs 49 and Rs 59, respectively. "This is fusion food for the masses. Most attempts in India at innovation are restricted to Indianising the product through flavours by adding masala or some very overtly Indian ingredient.

We are bringing a very western idea of minced protein filling in place of a patty and marrying it with Indian street food code of crunchiness," said Dev Amritesh, president and COO at Dunkin’ Donuts India. "We don’t react to competition’s pricing.

Our strategies are long term, not based on short-term gimmicks, and we believe in everyday pricing which is sustainable," Burger King India CEO Rajeev Varman said. KFC, too, sells its zinger burgers under Rs50. Dhruv Kaul, chief marketing officer at Yum Restaurants, which runs KFC and Pizza Hut, said: "We occupy various price points to drive volumes." KFC operates in sub-Rs 50 segment with multiple burgers starting atRs29, and in the next two weeks, will roll out a new range, also under Rs 50, Kaul said.

Carl’s Jr is being brought to India by Cybiz Corp. It has said it will start operations this year with 100 outlets. Wendy’s, the third-largest hamburger chain in the US, also plans to set up India operations this year.