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growth 2015-02-09

How \'odd\' locations are catching \'right\' business

Restaurant joints are a major crowd puller in India. Usually sited at malls and hyper markets which are in the limelight, the brands are now strategically entering odd locations like hospitals, ministries, railways and canteens.

By Deputy Features Editor
How \'odd\' locations are catching \'right\' business

In today’s retail scenario, location does play a key role in generating footfalls. And to achieve this objective, restaurant brands are opting for unexplored locations to reach a wider consumer base. Brands like Subway, Café Coffee Day, Bikanervala, Joost Juice, Sagar Ratna, and Pizza Hut amongst others have opened their outlets at odd locations. 

Subway, the sandwich chain, has entered the realm of college campuses, hospitals, and railways and ministry offices, as its adaptable menu is convenient and fits the needs of customers who visit these locations, and who are on the lookout for a meal on-the-go.

Manpreet Gulri, Country Head, Subway India, said, “Subway has minimal space and equipment requirement for its restaurants, a concept convenient for all its stores, particularly those in non-traditional locations.”

Rivoli Sinha, Founder Director, Joost Juice, who has opened outlets at hospitals, shared, “In today's time, when we talk of hospitals like Medanta Medicity or Fortis, the food courts there are as comprehensive as any mall.”

Trending on different requirements

The requirements to start restaurant chains at these locations can vary from one non-traditional location to another, depending on the demand that comes from that particular location. 

For instance, restaurants located in airports and hospitals require extended hours of operation, whereas, a restaurant situated in educational campuses and ministries would operate in accordance with college and ministry hours.

Deepta Gupta, Executive VP, Bikanervala shared, “When we plan to open a store in these places, we keep in mind that we have to serve better than others, as we already know that these places are not so luxurious to have food randomly. With this view, we provide them good and hygienic food at a reasonable price to needy people who can come with their family and eat at our outlets without any health problem.”

Praveen Bodduluri, COO, Vaango, the South Indian chain by Devyani International, said, “Consistency in delivery of quality, good taste product with great speed of service and world-class hygiene, along with the ability to generate excitement on a regular basis together with relevant new offerings and variety is the key to success in non-traditional locations.”

Experts in the industry are of the opinion that in terms of standards and operation, there is no major difference between a traditional and a non-traditional location. However, non-traditional locations have specific time and space demands, which are in accordance with their own operations.

Business potential

Non-traditional locations offer a lucrative business avenue, allowing businesses an opportunity to reach new customers and expand their franchisee network.

Hospital chains like Fortis, Medanta and Apollo in Delhi-NCR, Chennai, Mumbai, Kolkata and other cities are tying up with brands to open food courts at their hospitals. Devyani International, which owns brands like Vaango, Creambell, and has franchisees of global chains such as Pizza Hut, KFC, and Costa Coffee, is operating food courts at different airports and hospitals.

As these brands have sensed that good business can be drawn out of these locations, they are aggressively opening outlets at these sites. “If the right choice of hospital/campus or railway station is made, it’s surely a profitable venture. It’s primarily different from other places, as it has a great business potential every hour of the day and is equally business-friendly on weekdays and weekends,” added Bodduluri.

Commenting on the same, Sinha informed, “We have the smallest store at Medanta hospital, just 80 sq ft and it does great numbers. The average business drawn from this store is Rs 40,000 per day.”

Gulri said, “On a per square foot basis, on an average, non-traditional locations outperform traditional locations in revenue and profitability.”

However, as long as the product that you sell is worthwhile, drawing business from any location is not a big deal. People today want to experiment and specially try more health options.

Way ahead

Unlike other locations, where the promotion strategy is based on pull marketing and generating footfalls, these locations are primarily dependant on Catchment Marketing. The footfall is already present and thus, the promotion strategy of these locations is designed to ensure maximum visibility in the catchment, making the customers aware of the location and, with time, it will become the preferred food partner of that catchment.

With global chains entering these odd locations, we can say that these locations will surely be the next big strategy for restaurant businesses in India.

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