News: Indian food retailers for larger realty platter
(TNN 22/12/2006) New Delhi - Size does matter. Food and beverage retailers are increasingly opting for larger-sized retail outlets to tap the growing appetite of the Indian consumers for eating out. As far as floor area goes, fast food players like McDonald’s, Pizza Hut, Barista, Costa Coffee and even the delivery-focused Domino’s are learning that bigger is definitely better.
“Eating out is a form of entertainment in India. A Technopak study shows that an Indian family’s expenditure on eating out is next only to their food and grocery spends,” says Vikram Bakshi, MD, McDonald’s India. As McDonald’s expands in smaller cities and towns, it is going for larger outlets with at least 100-seats, against the average 80-90 seats so far.
Players say higher rentals due to increased area are compensated by greater volumes and higher ticket size per order. No wonder, Domino’s has re-modelled its delivery-focussed strategy to make way for additional dining space. All new Domino’s outlets will have a dine-in capacity of 20-25 seats along with the standard take-out counters. According to Domino’s India marketing chief Dev Amritesh: “We introduced additional dining space in some outlets two months ago and sales increased by about 30%.’’ Coffee chain Costa is also looking at larger-sized outlets with about 1,500-1,600 sq ft of floor space as against the existing standard of 800-900 sq ft, while Pizza Hut is also gunning for bigger outlets as it expands further. “We need bigger outlets to fully tap our customer base,” says Virag Joshi, CEO, Devyani International, master franchisee for Costa and Pizza Hut in India.
Barista is following suit by adding generous lounging space at its upmarket Creme format. “A larger sitting area attracts more customers and leads to higher ticket size per order,” says Rini Dutta, marketing head, Barista.
With organised F&B retail growing at over 30%, the sector offers one of the most lucrative returns on investment with better returns per square unit of real estate as compared to other retail formats, says an industry expert.
This realisation has come with time and experience. “Initially, even the most formidable F&B chains had opened smaller formats in India as they were unsure about the market response. Now, with experience behind them and a better idea of consumer demand, retailers are getting bolder and going bigger,” says Technopak Advisors COO Harminder Sahni.
“Eating out is a form of entertainment in India. A Technopak study shows that an Indian family’s expenditure on eating out is next only to their food and grocery spends,” says Vikram Bakshi, MD, McDonald’s India. As McDonald’s expands in smaller cities and towns, it is going for larger outlets with at least 100-seats, against the average 80-90 seats so far.
Players say higher rentals due to increased area are compensated by greater volumes and higher ticket size per order. No wonder, Domino’s has re-modelled its delivery-focussed strategy to make way for additional dining space. All new Domino’s outlets will have a dine-in capacity of 20-25 seats along with the standard take-out counters. According to Domino’s India marketing chief Dev Amritesh: “We introduced additional dining space in some outlets two months ago and sales increased by about 30%.’’ Coffee chain Costa is also looking at larger-sized outlets with about 1,500-1,600 sq ft of floor space as against the existing standard of 800-900 sq ft, while Pizza Hut is also gunning for bigger outlets as it expands further. “We need bigger outlets to fully tap our customer base,” says Virag Joshi, CEO, Devyani International, master franchisee for Costa and Pizza Hut in India.
Barista is following suit by adding generous lounging space at its upmarket Creme format. “A larger sitting area attracts more customers and leads to higher ticket size per order,” says Rini Dutta, marketing head, Barista.
With organised F&B retail growing at over 30%, the sector offers one of the most lucrative returns on investment with better returns per square unit of real estate as compared to other retail formats, says an industry expert.
This realisation has come with time and experience. “Initially, even the most formidable F&B chains had opened smaller formats in India as they were unsure about the market response. Now, with experience behind them and a better idea of consumer demand, retailers are getting bolder and going bigger,” says Technopak Advisors COO Harminder Sahni.
posted by InCar Group Press Room at 22:55
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