Friday, January 13, 2012


What lies ahead for the catering sector in India? Though scanty reports on the present status of this sector do indicate a booming business, this trend need not last for long if one goes by the experience of this sector in other countries. Having higher income in hand may drive customers in hordes to restaurants but such a situation also raises aspirational goals, shifts the goal posts and induces frustration among the patrons. In India one of the sectors of business that is doing extremely well is catering business and the margin of profit is growing exponentially with steep increase in prices of their offerings, forcing some of the lower middle income group of population to shy away from "eating out" option more and more, though it might not have affected others with unlimited disposable income at their disposal. The trend being foreseen in the US may not be too relevant to India but still it is a pointer to the likely happenings in the coming days for which Indian catering sector must be prepared if not to day but in the not too distant a future.

"Agents can head off this scenario and build a strong consultative relationship with their restaurant customers by asking key questions at renewal time. Here are some of the trends that could put restaurants at risk and the questions agents should ask their restaurant customers :
    1. Mobility. Has the restaurant added new services, such as delivery of meals using hired drivers with their own cars?
    2. Branch out businesses. Has the restaurant started a new line of business, such as catering?
    3. Trendy foods. Has the restaurant introduced new menu offerings as part of the strategy for attracting more customers, such as locally sourced foods, an emphasis on organic ingredients or assurances about non-allergenic ingredients?
    4. Additional payment methods. Is the restaurant accepting new methods of payment, such as online credit charges or smartphone purchasing?
Armed with the answers to these kinds of questions, you can offer your customers a menu of options that go beyond the coverage required for an on-site restaurant operation. Insurance carriers with experience in the food services industry can work closely with you to make sure your customers have the right "ingredients" in their policies."

Discussing about the prices customers have to pay at an ordinary restaurant which have practically doubled in the last three years in the name of inflation, it should not be forgotten that there is a "Lakshman Rekha" or a point of no return as far as the customers are concerned. Probably catering sector is under an illusion that all people in the country have plenty of money to squander like the young IT professionals or the much pampered government employees, corrupt as well as honest. India is still an affordable country where it is possible to get a full and decent meal in a functional restaurant at a price less than Rs 20 while most restaurants have hiked up the same to Rs 50 and beyond. Any restaurant in a city with tolerable hygiene and minimum ambiance will cost a family of four at least Rs 250 but imagine how many families can afford this if such restaurants are to be visited at least once in a week! Restaurant associations must ponder over this fact and unless there is a genuine attempt to rationalize prices they may have to face the wrath of the people in the form of reduced patronage and infrequent visits to their establishments. One of the reasons for the street vendors to become darlings of the people and make them reputed landmarks in may towns and cities in India and for the steep popularity of the Food Truck phenomenon in the US is precisely the fact that the organized restaurants are pricing themselves out of the minds of common man! Beware of this trend!


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