Slice of food business
Which business sells you novelty, convenience, luxury, fun, family time, satisfaction, happiness, service, entertainment, valuefor-money, and trust? All enterprises do, in varying degrees, but the food services industry is perceived to offer us all these. Madhusheel Arora writeschandigarh Updated: Aug 04, 2013 10:59 IST
Which business sells you novelty, convenience, luxury, fun, family time, satisfaction, happiness, service, entertainment, valuefor-money, and trust?
All enterprises do, in varying degrees, but the food services industry is perceived to offer us all these.
However, the around Rs 2,500crore organised business in the tricity needs to have a stomach for a fight to carve a pie in today’s tepid economy. Tricity residents do enjoy eating out, as evident by an average of an opening a week. Most sink without a trace due to faulty planning, and mostly because this is a seductive but unforgiving business.
One of the things owners fail to consider is that wastages are mindboggling as you are dealing in perishables; patience is vital.
The Rs 11,000-crore McDonald chain’s success partially stems from its investment in cold storage and logistics. It surveyed the scene and set up base for five years before opening its first store in 1996. Domino’s has also started its commissary (raw material kitchen facility) in Zirakpur.
The average turnover of a quality restaurant in the tricity is Rs 1 crore a year, at its most conservative, but margins are falling as costs are rising and there is little scope of price increase.
“The rich will keep eating out. Students do not fund themselves, the weak economy has squeezed out the professionals. A la carte menus are on their way out. Pre-set menus at a pre-determined price point do help us a little,” says Manmohan Kohli, owner of The Aroma.
Location, menu, service, ambience, home delivery and innovation matter. Most establishments in the tricity are missing a trick by not emphasising delivery enough, as distances are small. Overemphasis on ambience is far too common. This is not show business after all, except for the very tiny minority of the super-rich.
The industry’s grouse has been a high VAT of 12.5% plus other cess, ensuring that a customer ends up paying 20% over the menu rate.
In the tricity, there are far too many players creating clutter rather than enriching the scene. Service is reasonable, but not extraordinary except where it does not matter as the guests are too busy enjoying themselves. Self-service, except at McDonald’s, has failed to find takers.
What is new in tricity? A concept that wanted to combine new-age gaming and aimed to target children, Kids Cafe, was launched in Panchkula and four other places in the North, but failed as the brand owners, Nagpur-based Fylfot Hospitality, did not consider cultural differences, and the owners reportedly backed off after taking money. The concept has value and can work.