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Places of worship top draws for big food services firms, Retail News, ET Retail


Restaurant, cafe chains on temple run: Places of worship top draws for big food services firms

Ayodhya, the Golden Temple, Vaishno Devi, Tirupati and Shirdi have become top draws for multinational and Indian restaurant and cafe chains such as Burger King, McDonald’s, Domino’s, Burger Singh, Subway and ChaiPoint. They are setting up stores at such pilgrimage complexes that offer large captive markets and a first-mover advantage as they look to expand physical stores after two years, while abiding by religious dictates.

“Most of these chains are looking at expansion by segmenting the market, to tap niche locations such as pilgrimages, highways, places of historical prominence and tourist places, as consumers return to out-of-home dining, travelling and shopping,” said Pankaj Renjhen, joint managing director at real estate consultancy Anarock Retail.

Rajeev Varman, chief executive of Burger King, which opened its first store in Katra, where Vaishno Devi temple is located, said: “Our new restaurant in Katra is the world’s first Burger King outlet that is 100% vegetarian with no onion and garlic.” The Everstone Capital-backed Burger King, which operates 325 outlets, said the food served at this restaurant “is in line with expectations of devotees”.

Restaurant, cafe chains on temple run: Places of worship top draws for big food services firms

The India unit of another US chain, McDonald’s North and East, has been allotted two sites by the Vaishno Devi Shrine Board on the yatra route that are expected to be operational before September end.

First-mover Advantage
The company plans to set up outlets in the Ayodhya, Kamakhya Temple and Katra complexes in the coming months, said Anant Agarwal, promoter of McDonald’s North and East. “We will be offering pure vegetarian, no onion and no garlic products at affordable prices,” said Agarwal. McDonald’s North and East has two existing 100% vegetarian outlets at the Golden Temple in Amritsar and Kurukshetra in Haryana, which Agrawal said, have average sales of over Rs 1.5 lakh per day per store.

Executives said places of worship are turning out to be top draws for big food services companies since it gives them a first-mover advantage.

Kabir Jeet Singh, co-founder of the Negen Capital and LetsVenture-backed Burger Singh, said the chain is in the process of setting up its store in Ayodhya near the Ram mandir complex.

“Fit-outs are going on and we expect to open the store in a few weeks from now,” Singh said. “There is a large captive market and lack of competition in places of pilgrimage. Devotees want quality, hygienic food which is missing in many of the places of worship which have large footfalls.”

While rentals are competitive, executives said operations for companies with a wide reach have reached critical mass in their supply chains, so they are able to service smaller markets better now, compared with even a few years back.

Tea-cafe Chai Point announced its first store at the Town Hall Complex near Golden Temple this week, to add to its existing network of 180 stores. Chai Point chief executive Amuleek Singh Bijral said the chain organised a “chai langar” at the Golden Temple on the morning of August 15 “as a tribute for entering the holy city”.

The challenges in setting up outlets in the smaller, but high-footfall sites, are similar to that of any smaller town, real estate executives said.

“The rentals in these places are entirely market driven,” said Renjhen of Anarock Retail. “The challenges are to get real estate with facilities and amenities, and complying with local regulations.”

Domino’s, Devyani International and Sapphire Foods-operated Pizza Hut and KFC as well as McDonald’s have said in their quarterly earnings that offline expansion is back on the table, after two years of pandemic-induced focus on deliveries. Jubilant FoodWorks-operated Domino’s Pizza, which has over 1,500 outlets in India, counts its store at Tirupati as one of its best-performing ones. Vaishno Devi had an annual yatra footfall of 5.59 million visitors in 2021, according to the Mata Vaishno Devi Shrine Board website. The Golden Temple is known to draw in over 100,000 visitors daily on weekdays, and 150,000-200,000 on weekends, an earlier report by the UK-based World Book of Records said.





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