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June 19, 2020
“The industry has no reserves. And now with all the constraints from the curfew to the liquor ban to the reduction in the capacity we are all going to lose money for a few months. On top of the losses during the lockdown, this is very hard to recover from and hence many are closing,” said AD Singh, the founder and Managing Director of the Olive Group of Restaurants.
New Delhi: The restaurant industry fears 30-40% eateries (from the organized sector) will shut down shutters soon out of the half a million present in the larger cities. Popular restaurants in Khan Market, New Delhi have already announced closure and many to follow suit, as shared by industry sources.
Some ground realities
“The industry has no reserves. And now with all the constraints from the curfew to the liquor ban to the reduction in the capacity we are all going to lose money for a few months. On top of the losses during the lockdown, this is very hard to recover from and hence many are closing,” said AD Singh, the founder and Managing Director of the Olive Group of Restaurants.
It takes no science to understand why the restaurant industry is the worst hit as opined by the industry experts. The industry which thrives on socializing and creating good times with family and friends is surely the worst hit where maintaining social distancing now is the norm. Besides, one of the primary reasons for the closing of restaurants is that it’s a capital intensive business wherein the daily churn is required to get going.
National Restaurants Association of India (NRAI) President Anurag Katriar said the sustainability cost is very high in the restaurant industry. There is no working capital and there is uncertainty in business volumes going forward. The volume is expected to be subdued as will need cash to fund losses that restaurants are unlikely to get. Further, the operational cost including the rentals is very high to afford.
Even if the restrictions are not there, customers at this time will not be in that state of mind to dine out. Economic factors as well as the fear of spending some good amount of time (40 minutes to one hour) in a closed environment where many strangers will come and go does not look feasible for consumers.
Also, high rental is another cascading factor in the operating cost. Moreover, with the kind of guidelines to operate a restaurant business these days, many would not have the capability to follow such guidelines of social distancing and fewer footfalls, no liquor, etc.
“Eating out at restaurants is not a necessity, by and large; it’s a part of discretionary spending when you go out, socialize ― it’s all part of that. If you are not in a secure mind-frame about your future income, you will be as conservative as possible, and these are the kinds of expenditures that get knocked out first,” said Devangshu Dutta, founder, Third Eyesight.
“The restaurant industry was always a high mortality rate industry but the effects of the pandemic has been devastating. Some estimates say that 25-40% of restaurants may never open and even those that open will have to deal with low sales for a few months,” said Zorawar Kalra, founder of Massive Restaurants.
“I see the cost to sustain closure is very high. Many don’t have any resources which will impact the industry in such a way that 30-40% of restaurants will not reopen,” Katriar said.
Maintaining the utmost care in health and hygiene measures may prove a double whammy for restaurateurs. Firstly, it will add to their operating costs but they won’t be able to do away with this measure-as this is the only way to bring back consumer confidence. Adopting digital menus and digital payment solutions is another area they will have to travel around.
What’s in the offing?
Maintaining the utmost care in health and hygiene measures may prove a double whammy for restaurateurs. Firstly, it will add to their operating costs but they won’t be able to do away with this measure-as this is the only way to bring back consumer confidence. Adopting digital menus and digital payment solutions is another area they will have to travel around.
Besides, working with 50 percent or less of total capacity to ensure social distancing, the restaurants will probably have to get on the apps that provide online reservations, pre-ordering, and waitlist management to help minimize the queue of people waiting to be served. Popular restaurants have already started with thermal scanning for employees as well as consumers.
So, in the post COVID era, thermal scanning will be the new metal detection initiative that the restaurants will have to partake.
“Restaurants will have to opt for digital menus, contactless food, and sanitization among others. And with 50 percent occupancy, no alcohol and reduced working hours-restaurants will not make any money,” said Riyaaz Amlani, MD of Impresario Handmade Restaurants and the former President of NRAI.
Source: etvbharat
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June 17, 2020
Written By RASHMI PRATAP
A handwritten note on a piece of recycled paper plus a hand-made trinket or pen is what one receives along with every order from Gwalior-based iTokri, an online store of handcrafted fabrics, jewellery, paintings and other artworks. Just like its little free gift, all the products in iTokri’s catalogue are unique and especially crafted for the brand, which has been doubling its revenues every year since launch in 2012. The small town retailer has achieved all this without following the typical e-commerce template of being a marketplace.
iTokri online is India’s only crafts and artwork retailer with its own inventory of handmade artisanal products ranging from Punjab’s phulkari dupattas and Gujarat’s bandhani sarees to Andhra’s ikkat handloom fabrics and Odisha’s pattachitra paintings. It sources products including jewellery, dress materials and household items from nearly 500 artisans and NGOs across India. iTokri founders Jia and Nitin Pamnani believe in taking away the burden of sale from artisans and allowing them to focus on what they are best at – their craft.
The inventory model
“Artisans don’t have the financial strength to hold on to the inventory after production. If we put the onus of holding inventory on the artisan and tell them to dispatch the products as per demand, we cannot succeed. We buy from artisans in bulk, stock goods at our warehouse and courier orders from here,” says Pamnani, a documentary maker who left Delhi in 2010 to start the sustainable business in his home town Gwalior with Jia.
“Some of my friends were in the art and crafts sector. They suggested that an e-commerce platform could work from anywhere in the country. Since the availability of traditional art and craft products was still limited to government emporia and exhibitions those days, I decided to take the plunge,” he says.
Set up with an investment of Rs 50 lakh in 2012, iTokri has now expanded its reach to the nooks and corners of the country both for sourcing as well as sales in the last 8 years.
“Sometimes, artisans have ready products and we procure them. We also design our collection and send it for production, like we make our own prints for textiles and those are exclusive to us. You won’t find them anywhere else,” says Pamnani, adding that some factories make products only for iTokri.
Unlike other retailers, who follow the marketplace model and charge sellers or artisans a commission for using their platform, the inventory model is more capital intensive. “The working capital requirement in an inventory model is high as the retailer holds the inventory. Moreover, overheads like warehousing add to costs,” says Devangshu Dutta, Chief Executive at retail consultancy Third Eyesight.
In the case of Pamnani, warehousing is not a big cost as his family already owned one when he started the business.
But Dutta says an inventory model offers some advantages. “The biggest benefit is that you have the complete control over curating a product as well as its production and branding. This helps build a consistent customer experience,” Dutta adds.
Besides, when products are not generic, there are significant margin advantages to retailers. A case in point is itokri masks, the largest variety of which can be found on the online shopping site. From hand-woven handspun Eri silk natural-dyed masks to Lucknowi chikankari and ajrakh print cotton masks, the retailer has them all.
“There is a huge amount of margin play in that. If you are a marketplace, the major margin in such a case will go to the merchant and you will only receive the regular commission for usage of the platform. But if you own the inventory, you can decide the margin and selling price,” Dutta says.
Artisans love iTokri
While Pamnani has bootstrapped the venture so far and is fully in control, he has managed to keep away from increasing his margins to generate higher profits. “iTokri keeps the least margin of all the retailers we work with,” says Jaipur-based Ahmed Badhshah Miyan, award-winning master craftsman of resist tie and dye technique leheriya. He was associated with the Ministry of Textiles for many years, supporting textile traditions, and has won many national and international awards.
Award winning tie and dye craftsman Ahmed Badshah Miyan at his workshop in Jaipur. His son, Shahnawaz Alam, says during the lockdown, iTokri was the only retailer that did not stop payments to artisans.
“iTokri supported us and made payment for all orders as per schedule so that artists are not impacted.”
Alam and his father, who have been associated with Pamnani since 2012, say that iTokri trusts artisans with designs and colours, not forcing them to deviate from the tradition to meet mass requirements. “We don’t repeat the collection sent to iTokri,” says Alam, who supplies leheriya dupattas and sarees to the retailer.
iTokri also provides the name of the craftsman or organisation below every product detailed on its website, giving them due credit.
Hyderabad-based A G Govardhan, Padma Shri master weaver for ikkat, says Pamnani does not try to bring down prices by negotiating rates with craftsmen. “He wants perfect, authentic quality. Unlike others who are now mixing power loom products with handloom, iTokri’s only expectation from us is high quality genuine products. This supports traditional weavers like us,” he says.
t is this exclusivity, moderate pricing and following of the traditional craft processes that has helped iTokri gain a customer base of over 3 lakh across India and overseas.
Nearly 20 percent of these are from the UK, US and Canada and almost one lakh are regular buyers.
Despite its rapid growth, iTokri has not roped in any other investor so far. “We don’t want to go for funding as we are not yet ready for it,” Pamnani says.
It was love for sustainability that brought Pamnani to Gwalior in 2010. And it also helped him keep the business going even when the country was under total lockdown from March 25 till mid-May. During this period too, iTokri’s 8 am e-mailers announcing the collection of the day did not stop.
“There was enough in our warehouse to keep sharing with our customers. And we resumed operations in the first week of May itself after getting clearance from local administration,” says Pamnani.
The advantage: Gwalior, being away from the hustle bustle and without the population density of a metro, has reported only 150 cases of COVID-19 so far and most of them have recovered. “If we have to understand small businesses and work with them, we have to understand sustainability. And that comes from de-centralisation, not necessarily being in big towns,” says Pamnani.
At a time when most businesses are still struggling to resume operations in the COVID-19 world, iTokri’s toli (as its team is referred to) is busy writing lovely notes for putting in their customers’ orders.
And that’s the beauty of being a sustainable enterprise — it can sustain even during a crisis like COVID-19.
(Rashmi Pratap is a Mumbai-based journalist specialising in financial, business and socio-economic reporting)
Source: 30stades
admin
June 7, 2020
Indian retailers welcoming customers back as stores are opening up – a look at what changes are in store.
admin
June 3, 2020
Written By Priyanka Nair
Brand Equity decodes kirana stores’ unique brand of service on the retail frontl ..
When the first lockdown began, Kochi resident Lata Chellappan’s first call was not to family members in other cities but to Family Stores, her neighbourhood grocer. The 54-year-old housewife made the “panic-call” to stock her home with essentials from salt to soap. Bags full of supplies were delivered to her doorstep within two hours. By week two of Lockdown 1.0, regular customers of Welcome Stores in a South Mumbai locality began receiving daily WhatsApp lists and photos of available items. In some cases, these “live lists” shared by the owner were personalised based on customers’ purchase history and present needs. For some pasta sauce was on top of the list, for others it was dosa batter. No machine algorithm was powering it.
Family Stores, Welcome Stores, Prabhu Stores, Bansal Store, Apna Store, and over 12 million more small retailers like them are classified as ‘kiranas’, mom-and-pop general and grocery stores that are found on every pakka and kaccha street in the country. Most are no more than holes in a wall, many are disorganised and dimly lit, and a few upgraded ones have brighter lights, CCTV cameras and aisles wide enough for one plus basket. Together they account for roughly 95% of India’s over $500 billion food and grocery retail market.
Over the past three months, kirana shops have been on the retail frontline of the fight against Covid-19, helping millions of Indian households wade through a difficult lockdown and dramatically altered daily lives. The kirana’s brand of service, and their adaptability and agility, has won customers’ trust and wallets. In March, consumer spends in kirana stores increased by 40%. Meanwhile, consumer goods companies doubled-down on their efforts on this retail front and flocked to kiranas for their spectacular reach and hyper-local nature.
Source: brandequity.economictimes.indiatimes
