It was indeed a proud moment for Indore when it received NDTV Good Times Best Foodie City award in 2012 and why not? After all, we are truly India’s food capital by not just name or the foodie sagas, but by heart & soul. The market has always seen expanding & paving way for many restaurateurs’ and young entrepreneurs’ to try their hand in this ‘foodie city’. However, in the past few months this foodie city is too witnessing few downfalls leading to closure of some renowned food brands. To say in a nutshell, it’s a harsh truth to learn that more than 100 restaurants (list attached below) have been closed within the past 2 years!

It won’t be wrong to note that where everybody is seen capitalising the high-end food market opportunity, thereby enchasing on the food legacy that this city promises, reality stands bit different of what the food pundits really stated. To find out the inside and unsaid factors which make or break any restaurant in Indore, we spoke to some known restaurateurs’ of the city. Here’s what they have to say:

Location

Undoubtedly, one of the most important decisions to consider prior opening a cafe. Deepak Pore (33), Chef and owner at Cake Smith’s Alley shares his views sighting his cafe and bakery in Scheme 78, “Initially location for us was not that favourable but within the past months we have seen this area growing with some nice restaurants and Cafes, which calls for more footfalls. Also we now operate with a cafe as well, because working with just a bakery would be a tough call to deal with daily”, he adds. It’s interesting to note the rentals of Indore may start anywhere from Rs. 25,000/- for a 500-700 sq.ft. shop and go up depending upon the area chosen. “People in Indore are fond of eating, but they will not always walk an extra mile to reach a restaurant. The ones in their close vicinity or moving area should always be preferred”, exclaims Ravish Kothari (38) who recently relocated Chlorophyll Cafe to Bhawarkua.

Marketing

In this commercial capital, charges of hoardings for a month can range anywhere between Rs. 10,000/- to Rs. 5,00,000/- a month, Paper ads can cost somewhere around Rs.255/- per sq cm in any national daily etc. As such marketing here becomes an expensive but an un-ignorable activity. However, restaurants are seen using social media considering it as a powerful and highly effective tool in this competitive market. “We promote more on Social media like Facebook and specially Instagram & Snapchat. The cost is comparatively reasonable and often fetches us a good response on main days like events,” shares Karan Verma, owner at Kyro.

Customer Nature

With a leading population of 83.94% of Hinduism and Jainism in Indore, it won’t be wrong to call it as a ‘veg’ hub. “Yes, Indore is undoubtedly a vegetarian market, 70 % of the population is vegetarian, leaving a market share of around 30% for the non-vegetarian customers”, shares Pranay Ashtputre (31) from Meximus. Spotting outlets like Vijay Chat House on one end and Mainland China (which recently got closed) on the other, a slight learning about the eating habits was decoded. “People here do love to eat and are truly foodie but a kind of resistance is too observed when it comes to International cuisines. They love to nosh on some tangy and spicy tastes but are not always open in profoundly experimenting with exquisite cuisines as they are little bland in flavour”, shares a renowned Chef wishing anonymity.

Operational Expenses

On an average in any restaurant, the operational expenses easily count for about 60% of the gross sales. Restaurateurs must be very careful in calculating the ROI and not overlook through superficial figures. “Our monthly operational expenses usually fall somewhere around Rs.30 lakh, including food cost, rent, salaries etc. with such huge costs around we have to ensure sale of at least Rs. 1 lakh daily to ensure at least a minimalist breakeven”, says a restaurateur from Indore speaking on the term of anonymity. “I always ensure to avoid food wastage and reduce duplication of work, my food vendors are fixed and I avoid long logistical chains for day to day working. Also, staff training is very important as they are the one who keep a track on food cost, electricity and other minute expenses which take a big place in the accounting”, shares Prateek Sancheti (24), owner at Monkey’s Cafe.

Pricing Factors

Industry experts state that a restaurateur should strictly not exceed more than 35% of food cost as per the selling price. Also, price points should be carefully determined; starting from the base price and reach a few ball park figures to keep the menu justified. “Yes, but we operate on a high food cost of about 45% as prices have to be set low because of market factors”, shared Pankaj Singh Baghel, (28) owner of Spice Kitchen in Bhawarkua. “But as long as you know how to balance the expenses, it can still be handled well”, he completes. Looking at the service industry as a whole, restaurants are further burdened by plenty of taxes and payables levied by the government. “Apart of the food bill, you need to pay VAT @5% or 14%. Also, if you operate with an AC, you need to pay Service Tax @6% and lastly, Service Charge (taken by the restaurant) that ranges from 5% - 10% adds to the final billing amount. It makes the restaurant appear expensive but the same is just not in our hands”, shares Ronak Patel (27), CA and restaurant owner at 78, Boulevard.

Carefully analyse of slow growth

“What we have observed in the past years is that restaurant business retention in Indore is falling to just 30%-35%,” said Lalit Dawani (26) from Cravings. Closing of a couple of restaurants within just a short span of its operational phase came as an eye opener for many other premium brands who were eyeing Indore like a hawk. “Often huge brands fail to understand Indore’s nature as a food-market. Don’t rush into things too quickly and let restaurant build its place in the market”, says Nitin Thaker, owner Vijay Chat House. On understanding about the signs of a slow progressing unit, “Indore is governed by plenty of seasonal factors. Don’t get panic if your restaurant misses breakeven for 3 months. However, if things don’t improve within next 6 operational months, it is a wise decision to wind off then. Further, keep only monetary milestones in deciding about your progress. Overlook negative reviews or feedbacks on social media, if your sales show a gradual growth”, adds another restaurateur on the term of anonymity.

Customers Loyalty

The Chai Bar, one of the coolest hangout places in Indore receives a footfall of about 200 customers daily, out of which 60-70% are the repeat customers. “About 60% of our monthly earnings are promised by our loyal or repeat customers”, said Shashank Sonawale (30) owner at The Chai Bar. A similar figure was obtained for Bake n Shake, another happening restaurant in Vijaynagar and now in Bhawarkua too, Sandeep Singh (33) the owner shares, “70% of our crowd are the repeat customers who visit our place every other day”. On asking about how customer retention is created Sonawale said, “It takes months and years to build that equity. Find out and understand that 1-2 things that binds your customers and just retain that”, he spilled the beans with a gentle smile.

Market Updation

“We often take up stand – up comedy, open mic session, karaoke night etc. which keeps on engaging customers. In an upscale cafe, customers look beyond just food and ambience and you need an update about what they eye for next”, shares Anushri Jain, one of Indore’s female restaurateurs. “You have to keep a strong check on market’s movements. Know all the new entrances, menu developments, marketing strategies and everything that happens around the globe”, said Saurabh Shrivastava (28) owner at Mangosteen Cafe. “The best way to get a real-time knowledge is to connect and talk to people who know the in & out of market. Also, we believe in setting new trends in the market like we did with introduction of TRX training”, he adds on asking how he keeps a sharp eye on the market movements.

All that glitters is not gold and the same thing can be felt in food business too. You need to be exceptionally careful and calculative towards every move that you make. Further, we hope that the blog gave you some important insights which will be helpful in choosing the right things and taking the right decisions towards your restaurant. If there is anything else which you would like to know about, then do comment in the box below and we shall get back with it! #Stay Hungry #Stay Foodie!

List Of Outlet Closed Recently in Indore

• Rollacosta
• Chandni Chowk
• Dosa Plaza
• Yappy
• Golden Sticks
• Cafe Yummy
• Sarvapurna
• Taste A Bite
• Ostrich
• Kareem
• Udipi king
• Cravingz
• Lig - Nahata
• Moe's
• Frankie - 56
• Kebabistan
• Samosawala
• Treats Cafe
• FYI - Bhawarkua
• Indorilal - Anand Bazaar
• Baskin Robbins
• Meximus
• Jalpan
• Hokey Pokey
• Mark One Restaurant
• Mantra Restaurant
• Cream Center

• Blu Lounge
• McDonalds - Sapna Sangeeta
• Rambabu Ke Parathe
• Bon Appetite
• Chat Chatore
• Wow Wada Pav
• Goli Wada Pav
• Chlorophyll Cafe
• Cabana - AB Road
• Vyanjan Restaurant
• Horn Ok Please
• Kobe Sizzlers
• Guilt Trip
• Smokin Joes
• Between Breads
• Brew Nation
• Dana Pani
• Fortune Landmark
• Mainland China
• Herbs
• Rajdhani Thali
• Mangosteen (Closing on 24th October)
• Teas n More
• Cold Unn
• Havmor - Vijay Nagar
• Jolly's Bakery