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McDonalds India to hike prices amid rising inflation

Major fast food chain McDonalds looks to raise prices in India for the second chance this year, responding to growing inflation which, along with a financial slowdown, it anticipates to temper demand growth for at least the next 7 months. The corporation said on Tuesday it would increase prices by 5-6 percent. That chases a 5 percent hike after the government augmented the service tax rate in February. "There is pressure and it's a difficult situation, no doubt. But price increases are at 8-10 percent so we have to raise our prices," said Amit Jatia, vice-chairman of Hardcastle Restaurants, which owns the McDonalds license for west and south India. Customer paying out in India has taken a mark in the past three quarters as growing food prices, meager salary raises and the slowest Indian economic growth in a decade harm buying craving for clothes, cars and eating out. The burger chain told that its same-store sales stayed under pressure and even though they would breed, the increase would not be at the 22 percent reached in the financial year ended March 2012. McDonalds made entry in India in 1996 without its signature hamburger, with respect to local religious beliefs which mean many people ignore eating beef and pork. It has turned out to be India's biggest fast food chain operator selling chicken and fish burgers along with vegetarian items like McAloo Tikki, which has a potato pastry, and the McSpicy Paneer, packed with cottage cheese. The burger chain plans money expending of 5 billion-10 billion rupees in India over the next 3-5 years, generally for store development, Jatia said, adding India's long-term spending expansion story remained intact. McDonalds has currently 309 stores in the nation. The corporation looks for adding 80-90 restaurants in western and southern India in the next two years.

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