Restaurants Set To Ride The Mall Boom

The boom in the Rs 9000 crore retail industry is fuelling the growth of restaurants in the country. From a base of merely 23 malls in 2003, India will sport 220 malls by 2006 and an estimated 600 malls by 2010, according to studies conducted by Chesterton Meghraj, Knight Frank and KSA Technopak.

This surge is expected to witness a parallel increase of over 5,000 restaurants across the country in malls alone. In the next five years, players like McDonalds, Barista, Starbucks, Cafe Coffee Day, Qwiky’s, Dominos, and Pizza Hut are expected to route their expansions through malls.

“Malls have provided an impetus for restaurant development. Food and Beverage (F&B) outlets in a mall help to increase business substantially on account of high footfalls. Secondly, rentals in malls are cheaper when compared to a stand-alone property in a high street. And with malls now coming up with a revenue-sharing model for F&B, it will certainly lead to an increase in restaurants in the country,” expressed Anil Karumbaya, McDonald’s, Bangalore.

Large format malls replete with entertainment, retail and leisure components have sprung up in all major cities in India. Mumbai, Pune, NCR, Bangalore and Hyderabad will account for 74 per cent of all mall space by 2007. The balance 26 per cent will be made up by cities like Kolkata, Chennai, Ahmedabad, Jaipur, Nagpur, Lucknow, Indore, Ludhiana and Chandigarh.

According to Nandkumaarr Awatramani, president and CEO, Mardi Gras Restaurants Pvt Ltd, “A mall essentially will have a minimum of 5 outlets and if there is a food court there will be nothing less than about 10-15 outlets within it. So, while the numbers are huge, I feel that it makes business sense to go in for a mall only if the margins are high. If the margins are low, one should not be going in for an F&B outlet in a mall.”

Similarly, Sujoy Jana, head-food & beverage, Coffee Day Express, said, “Being in a shopping mall makes a lot of sense especially during the weekend when the footfalls are huge. One cannot get the same number in a stand alone outlet. It takes a much shorter period for us to breakeven when in a mall.”

“In fact we are looking at about 500 outlets of Cafe Coffee Day by 2008, of which we will aggressively look at the malls,” he further added.