Speciality Restaurants -- which runs fine dining chains Mainland china and Oh! Calcutta -- is feeling the heat as customers and corporate houses tighten their purse strings in a fragile economy.
Having had to close three loss-making restaurants in the last three months alone, Speciality now wants to ensure the present slowdown doesn't derail its long-term growth story.
Consequently, the company is taking some key steps. Being debt-free, Speciality has decided to stick to its expansion plans, with 30 new restaurants set to open by FY16, but has rationalised its staff cost by reducing employees per restaurant from 70 to 50.
Apart from its large portions, Speciality will now also serve regular portions to reduce the average price per dish and will also launch a home-delivery service in six months, which, it believes, will contribute 9 percent to its overall revenues.
Further, Speciality is also tapping the UK, Middle East and Singapore markets through the joint venture route. The company says with revenues from one overseas restaurant equalling three in India, this could be a game changer.
Speciality is also looking to acquire a diversified food chain and the management says they are ready to invest Rs 250-300 crore for this through a mix of debt and equity.
Anjan Chatterjee, managing director, Speciality Restaurants says, "We are discussing with many players and hopefully we should have an outcome in the next 3-4 months."
Though the question does arise about management's confidence to spread its wings in these trying times. Chatterjee says, "We've just done some research. People love Mainland China, Oh! Calcutta and Flame Grills. Its just that right now there are economic headwinds and therefore customers are less."
But even as Speciality takes long-term measures, it will raise prices by 5-7% to offset higher costs in the short term. A price hike that analysts say, although modest and much-delayed, could see footfalls drop.
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