Marred by the growing e-commerce sector and the constant decline in the footfalls, offline retailers are betting big on the concept of food courts to woo the consumers to their stores. Experts attributed it to the growing trend of eating out amongst Indian consumer.
“Food and beverage (F&B) and eating out as a concept in India has undergone a post liberalisation sea change – from once a month, the number of times young Indians and their families eat out has risen to as much as once or even twice a week,” said Shubhranshu Pani, regional director, retail services at
“Indians are also more amenable to experimenting with various cuisines and have developed ‘global palates’. On the heels of these changes in mid-set and demand, F&B in malls is no longer restricted to fast food options but now also encompass fine foods and multi-cuisine options under a single roof,” he added.
Food courts: The only saving grace?
Developers believe that food courts are universal revenue generator and will continue to attract crowd even if a mall is doing badly. “For this reason, there is no likelihood of rentals for food courts increasing. Along with anchors, these represent the factor that brings in assured footfalls, and no mall owner would risk making food court occupancy less tenable and attractive by increasing rentals,” stated Pani.
Besides, mall owners have been cautious with the allocation of space to food courts. It is often believed that a mall with a larger food court attracts higher footfall in the mall.
“How food courts are positioned in malls depends on the format in question. Sometimes, entire floors are dedicated to food outlets because they are such big draws. In luxury malls, the accent on food is highly exclusive, subdued and status-oriented, so a food courtis less viable than a carefully calibrated selection of fine dining restaurants,” explained Pani.
Similarly, Dinaz Madhukar, senior vice-president and mall head of
Market reports have suggested that mall operators ideally allot 15% or higher mall space for food courts. Mall owners felt that food and entertainment will play a pivotal role in attracting consumers to a mall due to the pressure on retail because of the growing onslaught of online shopping.
Promotes impulse shopping
Food courts are not only a revenue generator for mall operators, they are credited for pulling crowds to the retail outlets operating in a mall. According to Pani, food courts promote impulse shopping, thus converting footfalls into sales for the stores in the mall.
“As such, they are often a primary reason for people to visit malls in the first place. Since they are usually on the top floor, customers are required to pass all floors below to access them. This increases the opportunities for impulse shopping,” he added.
Pani also asserted that “Food courts also boost overall sales because they offer panoramic views of what is available at the lower levels, thereby raising aspirational levels. By virtue of being open format, a food court is able to meet entire families’ tastes simultaneously, with price points that are a draw for all categories of mall visitors.”
Sharing a similar sentiment, Madhukar noted, “As a matter of fact, the conversion rates in the food courts are always high, since they generate multiple sales simultaneously. Besides this, the food courts give a panoramic view of the in-house brands and increases the habit of impulsive shopping among the patrons.”
Alternative to standalone restaurants
While standalone restaurants has its own charm, the convenience and cost factors give an edge to food courts in a mall.
Pani explained that food is one of the major footfall drivers in a mall and food courts give customers and their families a plethora of cuisines to choose from under one roof.
“Food court space is usually immediately absorbed in malls. Many visitors now see malls primarily as a repository of cost-effective multi-cuisine food and entertainment. In other words, food courts (along with multiplexes) represent a completely separate set of retail with its own dedicated clientele. The conversion rate in food courts is always extremely high, since they generate multiple sales simultaneously. This is not the case in conventional retail outlets,” he noted.
The road ahead
While the culture of eating out in food courts has been growing, industry experts still believed that India lacks the depth of F&B operators and categories that is otherwise seen in other countries.
“The quality of operators – and their ability to expand, given the crunch in funding and manpower - continues to be a challenge. The period between 2012-14 saw a boost in the funding environment, but Indian F&B still has a long way to go but in terms of operation and management. Also, though the eating-out trend in India has grown, it has not yet matched the levels seen in South Asia, Europe and the US,” averred Pani.
Apart from addressing manpower and credit availability issues, industry players explained that in order to continue making F&B operators profitable in food courts, policy-level changes too are required.