BackFood outlets get prime spots in malls
Move aimed at increasing mall traffic is increasingly visible in cities such as Delhi, Mumbai and Bengaluru
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As Indians shop more from the comfort of their homes (or offices), at least for shoes, books, music, phones and apparel, mall owners in top cities are dedicating more space to food and beverage outlets.
It helps that dining out is still preferred to dining in.
The move, increasingly visible in cities such as Delhi, Mumbai and Bengaluru, is aimed at increasing mall traffic and sharpening the focus on food, the fastest-growing category in organized retail.
“We are increasing and relocating our space dedicated to food formats," said Suresh Singaravelu, executive director of retail at Prestige Group that runs a clutch of malls in Karnataka, Tamil Nadu and Andhra Pradesh.
Malls are also finding it less attractive to place food outlets on the top floor and are bringing them to the ground floor to make them more accessible, especially for those who visit a mall just to eat.
“Food is no longer an accompaniment to shopping, it is becoming a footfall generator in itself," said Singaravelu, who sees space for food and beverage outlets in new and existing malls going up to 20-22%, up from the current average of 15%. “We believe that habits of people are changing, from eating out once or twice a month they’ve probably moved to as much as twice a week."
“Food is being used as a lure to get customers back in the malls," at a time when many traditional stores are losing their clients to online retailers, said Pankaj Renjhen, managing director of retail at real estate consultancy Jones Lang LaSalle (JLL).
“From an occasion-led consumption, eating out has shifted to need and appetite," he added, underscoring the popularity of eating-out destinations such as DLF’s Cyber Hub in Gurgaon.
At India’s largest mall, DLF Mall of India, that is due to open by the year-end in Noida, entertainment outlets including food and beverage ones occupy close to 40% of the total space. A food court aside, the mall is stacking each floor with cafés apart from dedicating an area to 20-odd casual dining restaurants and breweries.
The space is a “conscious" decision by the management keeping in mind the “food revolution" that has moulded food entrepreneurs and more experimental consumers, said Pushpa Bector, head of the DLF Mall of India. “We want to create family dining options and create stickiness in the mall," she added.
“Food is the fastest growing segment in the organized retail side," pointed out Arjun Sharma, director of Delhi’s Select Citywalk mall, which has roughly doubled floor space dedicated to restaurants over the last three years.
Last year, Sharma and private equity firm Everstone Capital Partners formed a ₹ 10 crore joint venture on exclusive food and beverage formats in the Delhi-NCR region. “A lot of mall developers have approached us for drawing up full-fledged food and beverage concepts for them," Sharma said. “We will take another six months, fine-tune the model and look at opening six-seven food concepts, either food courts or stand-alone food concepts over the next two years."
India’s quick-service restaurant industry is pegged at ₹ 6,000 crore and is expected to grow 26% each year to reach ₹ 11,700 crore by 2017, according to research and ratings firm Crisil.
A recent report published by JLL said food and beverages have evolved from being retail’s poor cousin to the sector with the dominating edge in India. Frequency of consumption and openness to experiment are helping the growth of the sector, the report pointed out.
Restaurant owners are in turn getting better deals from malls. “We are receiving crazy overtures from malls," said restaurateur Riyaaz Amlani, promoter of Impresario Entertainment that owns chains such as Smoke House Deli and Social.
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