Popular restaurant chains opening up in non metros
The hiked real estate costs in the metros and tier 1 cities are causing several restaurant chains to smaller towns. With tier 2 and non-metro cities offering restaurants better returns on their real estate investments, and since the customer base and market potential are almost the same as compared to the other metro cities, quick service restaurant (QSR) chains and casual dining restaurants are looking closely at smaller towns for expansion.
But, they also continue to expand in the metros in order to maintain the growth they have achieved. A restaurant chain would invest about Rs 3 lakh for a store in a metro against Rs 50,000 for a store of a similar size in a smaller city. Oriental Cuisines, which runs the French loaf bakery and casual dining restaurants like Wangs Kitchen, Benjarong and Teppan, is soon moving their business into non metros also.
They state that they have partnered with local hotels there and have also signed up franchisees. Rentals are lower at about Rs 40 a sq ft versus Rs 150 in cities, and manpower is comparitively cheaper there. This has been said Narendra Malhotra who is the CEO of Oriental Cuisines. International quick service restaurants chains are also increasing their presence in non-metros.
Source: The Times of India
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