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How to redesign restaurant business post Covid-19

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Restaurants have to rethink their business model and find new ways to serve their customers. Also, with the unprecedented loss in revenue over the last few months, getting cost-effective in every approach has become imperative.

“Pandemic gave us the opportunity to look back at our own business model and introspect. what do we do with the product so that they remain true to what the brand stands for and at the same time bring down the cost pressure,” Anurag Katriar, CEO and Director at deGustibus Hospitality and President at NRAI said. He was moderating a webinar that discussed the ways of redesigning the restaurant business model in 2021.

Along with the various other factors which may lead to the profitability of the restaurant business, some of the most important aspects for keeping the business afloat are reducing the number of SKUs, keeping up with menu freshness, cost-utilisation of the ingredients, forming up a consortium for procurement and training staffs for multi-skilling.

Throwing some light on the menu engineering post-pandemic era, Rahul Akerkar, Founder and Managing Partner at Qualia Hospitality LLP said, “Post pandemic, one has to be clever in the way we construct a menu. There has to be a cost utilisation of ingredients. Changing the menu and adding more local and seasonal ingredients may excite the customer.”

Akerkar also feels that in these trying times, restaurateurs should coming together and form a consortium for procurement which may be of major help in cost-cutting. Food costs are one of the largest costs for restaurants. For a quick-service or full-service restaurant, food costs become a major factor in the ultimate success. While the industry, especially quick-service restaurants, presents unique challenges for staffing, most owners would say that controlling food costs is one of the most important keys to running a profitable restaurant.

Gauri Devidayal, Partner at Food Matters Group informed that the company has consolidated the ingredients within its multiple brands. In order to focus more on growing revenues, one also needs to invest in digital marketing and reduce the dependency on aggregators, she feels.

Apart from the food cost, labour cost also accounts for the majority of expenses in the restaurant business. The percentage of restaurant labour costs to sales averages at 22-40%, and in some cases, it can be almost as high as 75%. According to Riyaaz Amlani, CEO of Impresario Entertainment & Hospitality Pvt Ltd, there should be more multi skill training where employees can do anything and everything. However, it becomes then imperative for the owners to reward their employees. Also, to sail through the Covid-hit tide, Amlani opines that stability from the landlords is also needed.

While the industry saw many closures due to the rent issue, some took this as an advantage to write their growth stories. For Sagar Daryani, Sagar Daryani, CEO & Co-Founder of Wow! Momo Foods Pvt. Ltd, the pandemic came as a detox.

“It gave us the time to do differently. Business came down to 1/10th in the month of April. We decided to lower the cost and shut 46 stores during the lockdown. However, while many were shutting shops we got better locations to tap in during the lockdown. This came as a huge opportunity as we were able to grab the best of the locations at discounted rates,” he mentioned. The momo giant opened 52 new stores in 2020.

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