Ever since the mall culture crept in and malls presented themselves as lucrative retail environs, restaurant owners are divided on whether to set up shop within malls or to opt for high streets.
However, there are examples galore that increasingly, restaurants outside malls are pipping those within them in the revenue stakes. And if some players are to be believed, malls’ high operational costs (rentals and ancillary costs) are impacting feasibility of restaurants, driving them away.
According to industry estimates, there are up to 50-60% more expenses attached for restaurants in malls as compared to those in other retail locations. Take the case of the home grown brand Nirula’s which has only 15-20% of its outlets in malls. Their share to the company’s overall revenues is also the same.
Says Sudipta Sengupta, senior VP, marketing and sales, Nirula’s: “We conduct studies before opening outlets and have found that in malls, the operational costs increase as we have to pay substantial additional charges, over and above the rental. At present, our outlets outside malls are doing better business. We have the first mover advantage while setting up in high street retail locations, and manage to get preferential rates.”
