Nelson Wang says he hasn’t seen anything like this in the restaurant business in 33 years. “Even through the Kargil war and bomb blasts,” says the flamboyant restaurateur. What he’s talking about, in his dramatic way, is the reduction in cash inflow that restaurants have been seeing since the economic downturn.
Restaurateur Nelson Wang says people are spending much less money at restaurants and are instead drinking and dining at local gymkhanas.
Chain-smoking Davidoff cigarettes in his office above his flagship China Garden restaurant in Mumbai’s affluent Kemps Corner area, he says the frequency of big bills in the Rs5,000-15,000 range have halved at his chain of restaurants in Mumbai and New Delhi. “I can see the bills shrinking. From south Bombay to the suburbs, it’s happening at all establishments. Nowadays most people go out to eat only on special occasions and usually drink at home first,” he says.
That’s exactly what Mansi Maroo, co-producer with Shemaroo Entertainment Pvt. Ltd, does these days. Like many in the entertainment business in Mumbai, she interacted with clients at Juhu’s JW Marriott hotel, a hot spot for filmi business meetings. But these days, if there is any business to be conducted over lunch, the meetings are held in Maroo’s office and the meals are takeaways from nearby restaurants Mainland China and China Gate. “In the entertainment industry one can’t compromise, so to a large extent we just try to avoid entertaining outside,” she says.
Debashree Basu, the 36-year-old account director at public relations firm Text100 India Pvt. Ltd, Bangalore, loves food and socializing and used to spend an average of Rs16,000 a month on evenings out, including on food and alcohol, as opposed to the Rs3,000 she spends now. These days she replicates her favourite chicken kebabs at home at a fraction of the cost (Basu would pay about Rs300 per plate at a restaurant). “It doesn’t take more than an hour to make them,” she says. Cooking at home, she says, has been an eye-opener. “I’ve stopped paying for the ambience now.” Now her friends buy a bottle of their favourite vodka, cook or order takeaway meals and enjoy an inexpensive night in.
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Maroo and her friends no longer walk into a five-star hotel just for a drink. Most of the time they drink at a friend’s and then go out. “If at work we’re trying to cut costs in every way possible, I can’t be going out and blowing money after work just because it’s personal. It’s happening to everyone around you so it’s easier to make changes in your lifestyle,” she says. Maroo is “dying to” go to her favourite restaurant Indigo, but is abstaining for now. Instead she hangs out with her friends at the Willingdon and Malabar Hill clubs. “In fact, I’m trying to get my friends to learn poker so we can all stay home and have fun,” she says.
The phrase “recession dining” is fast becoming to the foodies what “recessionista” is to fashionistas. The latest issue of food magazine Gourmet, which normally features upscale restaurants, has added a feature about what to do with leftovers. On its cover is a picture of the humble ham sandwich. Food & Wine’s March issue includes an essay on buying the cheapest bottle on a wine list.
The urge to eat “someplace nice” ever so often hasn’t subsided but we’re thinking more before spending the kind of money we did earlier. For the restaurant business, it’s been one dampener after another since October; the smoking ban, an economic downturn and the Mumbai terror attacks happened in quick succession.
Henry Tham, a popular upmarket bar and restaurant behind the Taj Mahal Palace and Tower in Colaba, Mumbai, saw a drop in visitors on Christmas eve, because of the terror attacks. New Year’s eve was no better and Valentine’s Day, which in better times would have had a line of couples snaking around the block, was the proverbial nail in the coffin. “Last year we had an overwhelming response on Valentine’s Day, for Rs2,000 per head,” says Ryan Tham, who runs the place with his father Henry and brother Keenan. This year, even with the nearby Salt Water Grill, a romantic beach restaurant, downing shutters and despite a reduced price of Rs1,500 per head, a few tables remained unoccupied at Henry Tham.
Meals on deals: (clockwise from above right) Bon South, Bangalore, has introduced a ‘Beat the Recession Package’ with a weekend brunch. Madhu Kapparath / Mint; Debashree Basu now entertains at home and says she saves Rs13,000 a month. Hemant Mishra / Mint; and a dim sum brunch on Sundays at Chi Bar and Kitchen, New Delhi, gets you an unlimited supply of dim sums for Rs500. Hemant Mishra / Mint
At Zenzi, a popular nightspot in Bandra, Mumbai, and a regular haunt of models, it’s still hard to find an empty spot on weekends. Owner Matan Schabraq says that although the crowds keep coming, liquor sales, especially of expensive tipple such as Grey Goose vodka, have dropped. “In times of crisis people want to socialize more, but they are now thinking carefully before shelling out money,” he says. It’s what Wang calls “window shopping”—going to a bar and hanging out without ordering anything.
Restaurants in other metros are not having it any easier. Bangalore-based Madhu Menon, who runs Shiok, a restaurant serving Far Eastern cuisine, says most eateries are seeing close to a 30-40% drop in business. Sohrab Sitaram, owner, Tabula Rasa and Chi Bar and Kitchen, both in New Delhi, says that the size of groups coming in for business meals has shrunk too. “Until two months ago, whenever there was a business dinner organized by a company at Tabula Rasa, at least 10 or more people were part of the group. The number of diners has now reduced to four or five, including the guest who is being entertained,” he says. Sitaram has also noticed that diners at company-sponsored meals are no longer ordering exotic food such as lobster (sales of the crustaceans are down from 30 a month to about 12) or Blue Label whisky. “It’s all Black Label now,” he adds.
A story in The New York Times last month by their food critic Frank Bruni said restaurateurs are realizing it’s going to be a very tough year and that they would have to “hug the customer” if they want them to return. Hugging, in this case, means giving customers the kind of service and value for money that they won’t be able to resist.
A local example of “hugging” is the new offers on power lunches at restaurants. Nikhil Chib’s Asian restaurant Busaba is located in the heart of south Mumbai and just a couple of kilometres from the business district of Nariman Point. Chib read about $1 and £1 lunches in restaurants in the US and the UK after the economic collapse, and wanted to try something similar. “Of course, I couldn’t do a Re1 lunch so I came up with the Corporate Crunch Lunch. People do not want to spend too much time and money on lunches, especially in this financial climate,” he says.
The meal itself is the opposite of what you would expect in a crunch lunch—Rs349 (plus taxes) gets you a starter, a buffet spread of six main course dishes, two salads, a pint of Kingfisher beer and chocolate fondant with ice cream for dessert. Two of the restaurant’s best and most popular dishes are on the buffet—a vegetarian and non-vegetarian variety of the Burmese dish kaukswe, and the Steamed Fish with Chilli and Lemon. If you order à la carte, these dishes cost Rs450 and Rs395, respectively—more than the entire crunch meal.
This offer has also helped bring in the crowds and make the restaurant more popular at lunchtime.
Restaurants are also feeling the pain of their patrons and are offering deals that allow you to continue to eat at your favourite places without a heavy heart and a much lighter wallet. And they are not embarrassed to use the ‘R’ word to get them coming.
Bon South, a fine-dining restaurant serving south Indian cuisine in Bangalore and run by Billion Smiles Pvt. Ltd, has been offering a “Beat the Recession Package” with a weekend brunch since mid-December. For Rs550 plus taxes you can have a three-course meal with unlimited alcohol (and cocktails with fanciful names such as Chennai Cocaine, Rasam Vodka and Quick Gun Murugan).
The creative juices are flowing at restaurant chains as well. At Bombay Blue, the best-selling item on the menu is up for grabs for Rs99 every third Friday of the month. So a sizzler or a chhole-bhature that costs about Rs250 comes at less than half price. Copper Chimney in Bangalore has slashed the price of its lunch buffet from Rs300 plus taxes to Rs250, all inclusive. Dina Mukherjee, head, marketing and communications, Pan India Foods Solutions Pvt. Ltd, which runs restaurants such as Bombay Blue and Cream Centre and food courts in malls across the country, says they are striving to introduce more value-for-money concepts. “At outlets like Penne and Spaghetti Kitchen, we have introduced a glass of wine complimentary for our women guests every Wednesday,” she adds.
Vinayak Shourie, director, marketing, The Great Indian Restaurant Company, which runs the three Orange Hara restaurants in the national capital region or NCR, says they conducted research at their outlets to find out what kind of deals customers were looking for during the downturn. “We had group discussions and interactions with 60 regular patrons. Most said they find drinking out in the NCR very expensive nowadays. So we decided to launch a Bar Buffet concept.”
The restaurant has three price points in Bar Buffet, the lowest package starting at Rs695. You can order brands such as Bacardi rum, 100 Pipers whisky, Kingfisher beer, and cocktails such as mojitos. The customer gets unlimited drinks or cocktails for 2 hours from the time he or she is served their first drink. The Bar Buffet is available all day, seven days a week. “On an average, a customer ends up ordering four to five drinks. A 30ml peg of 100 Pipers costs Rs175. Earlier, a patron would have spent Rs875 on five drinks, now he spends only Rs695,” says Shourie.
At upscale bars, it’s an uphill task to keep the regulars spending on their favourite tipple. To pay in the region of Rs250-400 for 30ml of Smirnoff seems frivolous now. Henry Tham has never offered discounts, but these days there’s a sweet 30% discount on alcohol from 7-11pm. Even Hard Rock Café in Mumbai has introduced Rocking Hours from 5-8pm, during which you can order off a special menu featuring pitchers of cocktails priced up to 25% less than in the regular menu.
Chi Bar and Kitchen, Sitaram says, is cutting costs by lowering inventory, especially with wines and expensive spirits. The restaurant is likely to introduce happy hours soon, in addition to a dim sum brunch on Sundays (Rs500 gets you an unlimited supply of dim sums and dessert).
For Wang, the slowdown has been a mixed bag. While his restaurant business is slow, his catering business is at an all-time high. “So if the high-end restaurants are going empty, where are the people going? To the various clubs in the city,” he says. Wang caters for Mumbai gymkhanas such as the Cricket Club of India (CCI), Otter’s Club and National Sports Club of India and says his turnover there has doubled.
CCI recently renovated its bar after 17 years and came up with a lower-priced menu. Since it reopened in December, the bar is full every night. “We reduced our margins because of the recession and now the bar that used to be frequented by staunch old alcoholics has youngsters as well as women coming in. Members bring in many guests also,” says Badal Mittal, president of the club. A 30ml peg of Black Label costs Rs185 here, more than 50% less than at a top hotel, while a pint of beer, at Rs40, is less than its retail price (thanks to discounts passed on to the customer). A mini-meal at Chinaman, the club’s Chinese restaurant (catered by Wang’s China Garden) costs Rs135; it would cost about Rs500 at the stand-alone restaurant.
But Manu Mohindra of Under One Roof Hotel Consultancy Pvt. Ltd in New Delhi, who sets up restaurant projects, has a completely different perspective—he says this is the best time to be in the restaurant business. “With the recession, most restaurant owners have managed to renegotiate their rentals and that will help them tremendously.” He believes that most restaurants are offering deals not because there is negative growth, but because they understand that customers are looking for “more” in the same amount. “You won’t hear of any restaurant cutting prices across its menu by even 10%. Adding an extra dessert or throwing in a complimentary glass of wine does not cost a restaurant that much. However, it gets them goodwill and keeps the footfall steady,” says Mohindra.
Wang says that for the middle class, it’s the lack of disposable income that keeps people from spending; for the rich, it’s sentiment. “They’re saying the financial situation isn’t going to change for at least for two years. Let’s see how many restaurants can sustain themselves till then.” For his part, Wang is offering an all-you-can-eat lunch for his restaurant’s 25th year, starting in April. Your bill: about Rs400.
Seema Chowdhry in New Delhi, Pavitra Jayaraman in Bangalore and Parizaad Khan in Mumbai contributed to this story.