Eating Out in a Social Distancing Era

Up until the beginning of this year, the Indian food and service industry was all set to register about 10.4 per cent Compound Annual Rate Growth (CAGR) over the next five years to reach Rs 5.5 trillion by 2022. Then the unexpected occurred, and with the ongoing pandemic, most of the restaurants in India downed their shutters for over two months now, and are facing serious challenges even to pay rentals and salaries. According to CRISIL, organised restaurants account for ~35% of India’s restaurant industry, estimated at Rs 4.2 trillion in fiscal 2019. Dine-ins are 75% of the organised restaurants, with online delivery/takeaways making up the rest. Going forward, in a social distancing world, what will dine-in restaurants need to do to survive? Will Quick Service Restaurants and online delivery be the next wave?

Harit Kapoor, FMCG analyst, Investec India spoke with Mr. Tarun Khanna, Partner, CX Partners.