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Tier 2 towns have been great in bounce back: Riyaaz Amlani



NEW DELHI: As the pandemic-induced lockdown battered India’s eating-out market, forcing several small, casual dining restaurants to shut shop, Impresario Handmade Restaurants that runs the popular the Social and Smoke House Deli was quick to pivot with home deliveries and its first covid-ready outlet.

Riyaaz Amlani, chief executive and managing director at the company, is certain that diners will eventually come back to restaurants to celebrate milestone occasions and to socialise but admits the next few months are tricky. Edited excerpts from an interview:

With several states allowing restaurants to reopen and serve liquor, where are dine-in sales today?

Tier-2 towns have been really great in the bounce back. In the first month, we’ve seen business start off at about 50%. It’s still early days, we still have to go through that two-to-three-month period where we’ll have to normalise dining out again. Chandigarh started off with 50%, Delhi started off with 30-35%, Bengaluru was at 25-30%. Each day, each week, we’re seeing these numbers climb up slowly and surely. In fact for Smoke House, we have seen a greater comeback in some of the markets.

Impresario has opened two new Social outlets with partitions. Is that the future of eating out?

I don’t know if this is going to be like this forever. Yes, for the foreseeable future, people will be careful. I think for a very long time people are going to come into spaces to enjoy the vibe, but to be among people that they trust and know. This kind of creative partitions—is a fun way of making sure that people have a good time. We just launched Dwarka Social (Delhi-NCR), Elante Social in Chandigarh and we have one more coming up Thane.

Will you expand given the economic uncertainty?

We will be creating more stores, it is not like we are slowing down, but we are going to wait for a while till we press the button on new stores. There are a lot of opportunities that are presenting themselves in tier-2 towns which we will be taking up. Our plans are not fully crystallized but we know the direction. For now, we are taking Social to Indore in November; we are also doubling down on cloud-kitchen brands and we’re trying to increase the share of our delivery business.

What formats are doing well?

We have seen an exponential growth in brands that people trust. For Social and Smoke House Deli, we’ve seen delivery business go by 200% or in some cases even 300% (of pre-covid levels).

Whereas our cloud kitchen formats have seen a little bit of a drop, because again trust is a major factor when people are ordering.

Delivery or direct to customer is definitely becoming a big component of how we consume. And it is not just about restaurants and food deliveries but it is about most businesses. Customers are now getting used to going directly to a brand’s digital store front and ordering directly from there. This is coupled with the fact that there are a third-party delivery solutions like Delhivery, Dunzo, Shadowfax also available.

Brands people trust and brands people are comfortable with, I think customers will start ordering directly from them and not just go through aggregators.

Once business resumes fully, where do you expect delivery to be?

We’re definitely seeing it being about 10-15% (of total business). Dine-in is not competing with delivery. There might be a certain degree of cannibalization, maybe 5-6%. But overall, there’s a whole new customer base being added.

Do you expect consolidation in the industry?

Right now, everybody’s waiting and watching nobody’s rushing into anything. But it’s also a really great time because right now is where the opportunities are coming in. Debt as well as equity is a little restricted in the restaurant business. On the back of a strong recovery, we feel a lot of savvy investors will see the opportunity. For a very long time consolidation within this space was required and it is definitely on the cards.

Will you participate in this consolidation?

We are trying to put together something, nothing crystalized, but we are looking to put together a consolidated play. There will be M&As definitely in the future. Hopefully, we will be involved in some ways.

What are you demands from the government?

In fact, now more than ever, we will need the government’s help. And now is when the real pain will start. When things were shut, it was easier, but now it is the game of survival. Financial costs start mounting, and we are all operating under 50% to adhere to social distancing norms. It is going to be challenging bringing customer confidence back, it is going to be challenging de-stigmatising dining out.

With the central government, we are really pushing forward with extension of credit facilities that really need to be considered (for restaurants). We are lobbying very strongly with the government to allow input tax credit (under GST) for restaurants. We are also asking for loan restructuring and moratoriums. At state and municipal levels, we are asking for different things—ease of regulation, as you know that we are very highly regulated industry. We want certain licenses to be waived, we want the use of open spaces, late night permissions etc.

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