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Startup 22 Apr 2015

How food brands have replaced retail giants in malls?

Food and Beverages have evolved from being retail’s poor cousin to the sector with a dominating edge in India, says a report by JLL.

By Nusra Deputy Features Editor

The retail scenario in India is gradually changing as mall developers and managers are focusing on getting the best food brands at their locations. Or, we can say that the retail segment captured by the luxury and the accessory segment is being replaced by food outlets in the country.

Why food?

According to a research by Restaurant India, it was found that the space which was earlier allocated to top retail brands like Pantaloons, Happily Unmarried amongst others is now being run by food brands. With the growing ease of shopping at malls, people can now buy their daily and household needs which has given to a rise in the numbers of food outlets opening at these locations.

“Mall culture in India has evolved and is woven through many stages, now after every 7-8 outlets there has to be a food outlet,” shares Benu Sehgal, VP, Mall Head, DLF Place, Saket.

Not only this, with people becoming more addicted to the eating out culture, dining options have increased in the cities. And, as it gives a better traffic not only to the food brands they are dining in, but also to these malls making them the top rated malls and traffic generators in the country.

According to experts, being a complete food mall, Cyberhub is giving more revenue than any other mall as it is getting a heavy footfall and traffic not only on weekends but also on weekdays.

Zorawar Kalra who runs his restaurants in both high streets and mall locations, shares, “There are no thumb rules for footfalls. In some cases, the average footfall ranges between 20000-25000 people to 40000-60000 people on weekends.” e-Commerce- the game changer

As Indians are growing a habit of ordering through e-portals and players are getting good returns and easy to payment options without any difficulty to visit a mall or a location to buy a product has acted as a catalyst to force the mall developers to lease more spaces to the brands. Brands like Amazon, Flipkart, SnapDeal amongst others have changed the retail scenario in India. And to follow the same roots, retailers like Biyani have also announced their plans to take the e-route. Hence, we can see that with retailers taking an e-route, there is more scope for food brands to get a prime space in the mall.

"Retail market is suffering from one of the worst times because of the shifts towards e-Commerce and online space. If a person wants to buy a TV he can buy it from an e-player who is offering it at  great deals rather than walking to the malls and spending an extra penny on the same and I think it is the main reason which is giving prominence to food outlets in malls,” thinks Sharad Sachdeva, CEO, Lite Bite Foods.

Adding on the same lines, Rajeev Varman, CEO, Burger King India comments, “Many of the landlords at bigger complexes, when they bring in Burger King to their complex their valuation for the remaining property goes up and they are able to rent out some at higher rate because BK is there.”

And malls being an entertainment and experience destination have  turned towards food brands as they are the ones which are creating a win-win situation for both the parties. 

According to a latest report by JLL, Food and Beverages have evolved from being retail’s poor cousin to the sector with a dominating edge in India. Frequency of consumption and openness to experiment are helping the growth of the sector, the report elaborated.

Meanwhile, the cafe formats, the open bistros, casual dining chains, theme-based restaurants with very rustic and basic decors are gaining attention at these locations. Epicuria, the food mall located at Nehru Place has more outlets running in cafes and casual dining format and is getting good revenue out of it. Brands like The Beer Cafe, FIO CookHouse and bar and CCD are a hit at these locations.

“Earlier, we used to allocate over 17-20 per cent space to food retail formats which is now increased to 25-26 per cent,” says Yogeshwar Sharma, ED, Select CityWalk.

The group has also opened a food court at its second floor named, ‘My Square’ food courts, which is a joint venture between Select Citywalk and Everstone Capitals to promote the ever-growing demand of food in India.

Thus, we can say that food is no more an option today, it has become a traffic generator and looking into these valuations, many of the malls like GIP, Select CityWalk, and Prestige Group to name a few have relocated spaces to food brands which were earlier allocated to some other retail formats.

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