Tuesday, December 26, 2017

Highway Dining & Holiday rush!

I was among the lakhs of people who left our homes last Saturday as the long Christmas weekend and Christmas holidays began. Reports from all over the country in major cities mentioned long traffic snarls at the Toll booths located just outside the city. At Chengelpet Toll booth which is about 70 kms from where I live in Chennai, the queue of vehicles was for almost a kilometer with over 300 vehicles standing to pass through. We managed to cross in about 20 mins but that was just the start. For the next 100 kms all the way up to Villupuram, I was driving at an average speed of 70 kmph. Perhaps the slowest I have ever driven on this highway that I traverse once a month, at least.

Almost every notable restaurant on the way was filled to the brim with vehicles and people who were piling up like there was some major catastrophe coming up in Chennai. Almost all of us, like really, thought leaving before 6 am would help. Alas. Just that too many of us thought the same thing and ended up crowding toll booths, roads and restaurants. When I finally managed to stop at 9am for breakfast, there were about 70 vehicles and at least 200 people in the restaurant where we ended up. We were informed 30 mins waiting time to get a table. So, I preferred to walk up to the adjacent restaurant which is self-service, hoping things would be faster. When I finished breakfast with family, it took us almost the same time as it would have at the other restaurant. Murphy’s Law. We left after an hour plus break and drove for 3 hours and ended up at India’s top Restaurant Chain for South Indian food and glee, things were not better. This place was even more crowded than we had anticipated. Table service again and it took almost an hour plus for us to finish the grub and leave.

I asked Murugan (name changed), a waiter at the restaurant whether they expected such large turnouts and he replied in the negative. Yelling customers were a norm at most of these places who perhaps didn’t realise that some of the staff haven’t even had their breakfast, forget their lunch. As a Retail guy for 20 years, I truly empathized for the staff but I could do nothing more than wait patiently. Kamala (name changed) was frying fresh Vadas at the restaurant where we had breakfast in the morning and she said she’s been at it since 5.30am. Felt bad for the thankless staff members who ensured we, the customers got out food on time, fresh and tasty.

What could have been done differently was a bit of planning. Here’s my short list;

  • ·      Make a simpler, lighter menu. Keep just the basics available so customers don’t have to think too hard to order, and at the same time, the kitchen staff are quick to prepare the stuff ready. Items like Idli and Vada, French Fies, Samosas and so on must be prepared almost continuously so it acts as a filler when patrons order
  • ·      Add more temporary tables and chairs, plastic ones or metal or whatever. Most customers wouldn’t really care the quality of your furniture when their main motive is to rush out of the restaurants
  • ·      At one restaurant where they profess self-service, I saw that the staff were adding accompaniments like chutney and sambhar to each plate along with the main dish. I suggest this could just be done away with. Focus on the main dish and leave the add-ons to the guests. Keep the chutney and sambhar on the tables and let the customers take as much as they want. Yes, there would be a bit of wastage but we all save time together. Also, avoid four varieties of chutneys, no one just cares, just one would do. Ensure you give less choice to guests but what just matters.
  • ·      Hire local boys and girls temporarily to clean the tables & toilets faster. Use good quality cleaning liquids so the tables don’t stink for the next guest. Toilets must be spic and span. Efficiency and speed are the key.
  • ·      Restaurants with larger spaces and staff can perhaps have someone to usher or a sort of token system or tables assigned against request. This would ensure guests don’t pile up at each table and keep staring at those dining, instead wait patiently till their table is ready.
  • ·      Kids – the biggest challenge to be addressed. Keep them engaged. Have a magician or a story teller or folk art. Nothing free to be offered but something to keep them engaged. Have some crayons and paint books at bay, so the kids can keep coloring and be a bit more engaged. Tried and tested is a large Tv screen with cartoon channels. Be sure the kids would be glued in. But ensure there is no remote around, so there is no flipping of channels and fighting amongst young ones.
  • ·      Men – keep them engaged as well. Set-up boys who can wash the windscreens and bumpers. A good driver always likes his Car clean. Well, almost. A tie-up with local shops to sell additives, car cleaning fluids etc. will ensure the boys and men spend more time there than waiting impatiently at the tables.
  • ·      Ensure your staff are taken care well. Meet each one of them personally and ask if they had breakfast, coffee or tea, lunch, snacks and dinner. And their medicines, if any for some may be diabetic or have other ailments. Show empathy, they need it now more than ever. They are, after all your Brand Ambassadors. Shower them love and they will pass it on to the Guests. Ignore them and that’s what the customers will get as well.
  • ·      At the end of the weekend, if your cash registers ring more than usual, send them home with small gestures such as gift packs of sweets. Make them feel proud that your guys achieved ever-highest sales during this weekend and motivate them. Remember, most people don’t work just for money, they need recognition.

These are some very simple hacks but can go a long way in Guest satisfaction. Holidays are always about memories and we as Retailers, especially the F&B guys make a dent on the memories that guests carry. If there is a delay more than usual time, people fret. But when you throw in something extra, customers mostly remember only that “extra” whether it is “extra happiness” or “extra irritation”. With increasing mobility these days, people are travelling more than ever and they will continue to remember what you offered.

Once again during the upcoming New Year weekend, the restaurants and highways are going to get full. I really hope some changes are undertaken by Restaurant owners small and big to ensure better handling of customers and of course, their own staff. Happy New Year! 

Wednesday, December 6, 2017

How Cinemas impact Malls

I have a lot of firsts to my credit. The most recent one was to see a movie on the opening Friday with friends, although that’s not a first. The “first” really was that we were only 14 people in an Audi which can seat 196 people, at Inox Cinemas located at Chennai Citi Centre, a Mall of yore located in the heart of South Chennai which has been operational for a decade now. The film, a fictional fantasy is about a unique stone which can cure any disease (sic). Yea, that’s right, we are in 21st Century yet our film makers come up with such scripts. The film’s review itself calls for another article though. The lead actor is Gautam Karthik, who is the son of yesteryear chocolate boy of Tamil Cinema, Karthik who has acted in over 100 films as a Hero. Gautam’s first film “Kadal” was directed by Mani Ratnam, who also directed a film with Karthik in the lead in the mid-90s which went on to become one of his most popular ones – Mouna Ragam. After a few mediocre hits, Gautam is still figuring out his space in the Tamil Film Industry and his latest outing “Indrajit” is an apology for discerning film goers, even the once in a blue moon fellas like me. That the film was nauseating is an understatement. But we still hung on, with Pop Corn, Tea and Veg-Puff for company on a rainy day, which cost each one of us more than the cinema ticket price of Rs. 204. We sat through till the end-credits for the sake of – well, nothing. We were free that day and general time-pass types.

When I was getting out of Inox, I saw an almost empty Mall, at 6.30 pm. This for a shopping centre located in the most prominent part of Chennai with a GLA (gross leasable area) of over 1.50 lakh square feet. The main anchor tenants are Lifestyle and Inox and honestly do not do justice anymore as Anchors, for they have tried every gimmick in the book to draw customers. Even onlookers and jaywalkers do not drop in to this Mall anymore and the atrium of 10,000 sft looks like a ghost town, no exaggeration. Even as I took the Escalators down each floor until the basement, my heart bled how the attitude of the Mall Owners has led to utter deterioration of the precincts. There is no Coffee Shop, no Restaurant, no place to sit for a while, no nothing. Just a few shops who sell some random stuff and somehow make ends meet.

Adding insult to Injury, I had to cough up Rs. 90 for Car Parking charges upon exit. I actually asked the Parking attendant if it is fair to charge me for parking when there were only a handful people in the Cinema and we still gave the Mall a business of over Rs. 2,000 by the three of us. This was about 10 days back. The guy gave me a puzzled look, guessing I must be yet another Mall ranter. He was perhaps not mindful that his job is at stake should the Mall shut down in the near future. Perhaps, they may not. The Dubai based Mall Owners would probably keep funding the business as long as they can.

On 5th Dec. 2017, the Tamil Nadu State Government announced that Cinema Theatres must charge no more than Rs. 20 as Parking Charges for 4 Wheelers and Rs. 10 for 2 Wheelers. However, like any other G.O. this one doesn’t specify if the rate is per hour or for one show. The ambiguity is not going to help the theatres much, so they would perhaps choose what’s convenient to them anyway. The G.O. also doesn’t include Malls in to this order while there is already a local court ruling that Malls cannot charge exhorbitantly for Parking charges which has been further challenged by the aggrieved parties. The local Government has also said that next in line would be controlling prices of food items. Again, there is already a Court ruling that Prices cannot be different (more in this case) for branded products elsewhere other than Cinemas. This has somewhat been streamlined although items sold in loose such as Pop Corn & Nachos, food items like Burgers, Puffs, Samosas, etc. and aerated drinks sold by the Cup as well as Tea/Coffee do not fall in to this category. Some solace for the cinemas.

For over a decade and a half ever since the Mall revolution took over our lives in India, (Multiplexes which have been a part of it) it has been commonplace to see Cinemas charge heavily for the food and beverages sold to compensate the operating expenses. For Ex. Even though we were just a dozen plus people in the Audi, Inox had to still run the air-conditioning, have a person to issue and verify tickets, serve food and beverage and of course, clean the premises before the next show begins. Their costs do not come down with reduction (and vice-versa) in number of audience and therefore need to keep up with their costs.

This is somewhat akin to what the great Indian Democracy has been doing since Independence, with its somewhat socialist and communist ideals – Rob Peter to pay Paul. The Government subsidizes the poor by charging tax on those who can afford to pay and consume products and services. No wonder, India has one of the highest rates of Income Tax in the world (with less than 15% of the population paying Taxes!), and so are the Cinema Ticket prices. Unlike the USD 1 trillion Economy which the Indian Government manages, the cinema exhibitors as well as Mall developers and operators are not sitting on cash troves anymore. Each penny (they earn or spend) matters a lot and hence this concept of overcharging those who come to watch movies to counter their losses.

I have argued earlier that with the advent of OTTs, forget pirated copies, even new films unless they have top star cast or high budgets will not have takers at the Box Office. Veterans like Kamal Hassan have tried to release their films (Vishwaroopam as an example here) on Satellite Channels along with theatrical release which has seen stiff resistance. Recently, a short movie by the name “Lakshmi” released on YouTube and received rave reviews, giving the Director and the Crew enough exposure. Perhaps if the film is made full-fledged, it may attract more crowds at the theatre.

So who is to blame for this misery – of empty Malls and emptier Cinema Halls? Many people squarely blame the penetration of E-Commerce in India. By numbers, E-Commerce Retail accounts for just 1% (Yes, ONE Percent) of India’s total Retail business size. And for most Indians, watching a movie and shopping (in a retail store) is almost an Entertainment. They continue to spend their time on entertainment, but not anymore at Malls and Cinemas. 

Is anyone hearing? I don’t think so. Can something be done about this – Umpteen stuff can be done. It wouldn’t cost a lot of money to draw customers and audience in to Malls and Multiplexes. Reducing Parking Ticket charges is just the beginning. There’s a lot more than can be done. 

Is there willingness to do so by the Malls Operators? Hell, Yeah. But what’s topping them? Even I am confused. Why would someone not want to welcome those who wish to be.

Thursday, October 19, 2017

Deepavali Retail Sales – Less Fire, more Smoke

The week leading up to Deepavali was perhaps the most exciting times for Retailers. From Apparel to Consumer Durables, Motor cycles to Cars, people would flock to Retail Stores with their savings of the year. The period around Deepavali, which normally comes in the latter half of October or early November and the entire 3rd Quarter of a financial Year would contribute over 50% of Retail Sales for certain categories like Television sets, Refrigerators, Washing Machines etc. This was the trend through the 90s and the new Millennium.

Cut to mid-2000s, the evolution of Mall culture in India has been rapid, with over 1,000 functional shopping centers across the country. For every 3 new malls that open, 1 perishes and the trend is worse in certain cities, which were over-hyped by the Real Estate fraternity. The good part of Malls is that they provide customers 365-day access to regional, domestic and international brands. The footfalls used to be far higher in Malls a decade back than today – in act, today it has halved on an average to say the least. Since the prevalence of E-Commerce over the past 5 years, there has been all round the year discount on Electronics and Apparel which means customers are shopping more online than before, while the overall market growth has been tepid with Organized Retail registering a CAGR of 6-7% over the past few years. After MRP adjustment due to Inflation, there is hardly any positivity on the bottom-line numbers and Retailers have been struggling over the past few years. The Balance sheet has been strained a lot and to keep the monthly and quarterly Sales numbers looking up, Retailers have been offering various incentives to Customers all through the year.

The fight-back from Offline Retailers against Online Retailers has been merely on the price front which E-tailers have been managing all the while thanks to Wall Street funding in billions in the sector in India. That no E-Commerce company has been profitable in a decade (almost) nor have they been sold / acquired at a premium says a story that’s still unfolding.

So I set out this Deepavali to various retail stores to see what’s brewing and how the market is operating. The Offline Retailers are a worried lot. Fewer people are coming to their stores and even fewer are actually shopping. The bill values have halved in 5 years with customers picking lesser number of garments per bill. Consumer Durables retail is even worse with round the year launch of new models, availability across modern retail chains and low prices through the year. The best was saved for electronics, perhaps. I walked in to a retailer of mobile phones and enquired for an iPad. To my shock and surprise, he suggested I buy it online since the prices are far lower than his procurement prices.

Deepavali Retail Sales 2017 has been more smoke than fire, I guess. Local Retailers have taken full page Ads making Vinit Jain & Co. richer by a few hundred crores but the desired result is obvious that it has not translated in to incremental Sales. Smaller Retailers, with less than 3 shops are even more worried due to liquidity, cash crunch and rising debts. I never imagined that Retail would see such a gloomy period, but this is only getting more real. 

Wednesday, July 19, 2017

GST at Cinema Theatres

GST is the most searched term, perhaps in the past 30 days or so. India transitioned to GST on the midnight of 1st July 2017 with a special session of the Parliament, which was attended by the Prime Minister and his Cabinet including members of the Opposition. Much has been spoken about GST so I am not going to delve in any further. But I am presenting my views on how GST in Tamil Film Industry is affecting the trade.

In Tamil Nadu, there was no VAT on cinema tickets prior to GST. However, there was an Entertainment Tax @ 30% on the ticket prices. The DMK Government, when they claimed power in 2001 provided a reprieve to the Tamil cinema Industry for the said Entertainment Tax if the film had a title in Tamil and was provided a U Certificate among a few other clauses. That’s when Sun Pictures was floated (a division of Sun Media Network which runs Sun Tv & 45+ channels in four regional languages). The reprieve was used by most Producers with fancy Tamil titles including the all time highest grosser of Superstar Rajnikanth whose film directed by Shankar was titled “Enthiran” meaning Robot in Tamil.

The ticket prices in Tamil Nadu have been capped at Rs. 120 for Multiplex screens and Rs. 100 for standalone Theatres. The 120-cap was inclusive of 30% ET, which means the actual earning to the Theatre Operator was only Rs. 84. However, due to the largesse by the successive Governments, the theatres were able to earn extra – the ET collection was not passed on to the Customers, rather pocketed in to their kitties – obviously because the Producers knew they could hard bargain with the Exhibitors for a higher Minimum Guarantee & higher Revenue Share as well. This vicious cycle has been going on for a while with 9 out of 10 cinemagoers unaware of the same.

On June 30th 2017, the TN Government passed a mandate where the local body tax was applicable at 30%, which was over and above the GST. Cinema Exhibitors got in to a huddle on the 1st of July and decided to protest the TN Government’s decision and shut down the screens for four days from 3rd – 6th July 2017 incurring a loss of over Rs. 400 crores to the Industry. TN Government decided to put the levy on hold and allowed the Theatres to operate as per old norms.

Now here is the catch; GST had just replaced the Entertainment Tax and was 2% lower. Which means, the ticket prices should have gone down or remained as they were. But the smart industry guys have played their cards well by adding 28% GST on to the Maximum Ticket Price of Rs. 120 which is against the spirit of GST implementation. Interestingly, neither the Central nor State Government have taken cognizance of this issue and cinema goers have been forced to shell out more from their pockets. With the already sky-high costs of Pepsi, Coke, Popcorn and other Food & Beverages inside the theatres, regular visitors have been dissuaded leading to a 30% drop in tickets sold. If this trend continues, more footfalls will reduce and would have a deep impact on the film exhibition industry. A few star-studded movies are in the pipeline, which will decide if this move by Cinemas to pass on the GST to customers will have a significant impact. With burgeoning OTT Apps & ever increasing movies screened illegally on websites, the fate of the film industry is facing a Damocles Sword.

Friday, July 14, 2017

The Power of (No) Branding

Off late I have been travelling extensively across the state of Tamil Nadu on work – been conducting several Training Programs, to meet & work with Clients, etc. One such visit recently took me to a small town 500kms to the South of Chennai by the name Tirunelveli (Nellai in Tamil). The town is notorious for clashes among people at the drop of a hat although a lot has improved over the years in the areas of Law & Order, Crime, etc. The people in the surrounding areas have a certain slang of Tamil, which in itself is a famous way of speaking the native language. The Nellaiappar Temple in the town is world famous and is said to be 1.5 times bigger than the Madurai Meenakshi Temple. Bang opposite the temple is a shop that is as famous as the temple itself.

The temple goes by the name “Iruttu Kadai” meaning “dark shop” in Tamil. The shop has been around since 7 decades or more and is run by a North Indian family from Rajasthan. The shop, which doesn’t have a name – as in a Brand Name – is known by it’s colloquial name all over the world and makes just one product – a traditional sweet meat called Halwa. The sweet, although made across India in different forms is very unique to this particular shop. No one gets the same taste as they make and the family that runs the business have a unique recipe for the product which has been tried to be remade by so many people but no one gets “this” particular taste. And they don’t have branches either!

The shop doesn’t have a brand name and is open from 5.30pm to 8.30pm or till they run out of stocks whichever is earlier. Apparently, the shop owners produce 1 tonne – yes, you read that right, ONE Tonne of Halwa every day! And the sweet meat gets sold within a span of hours. Even till this day, the shop doesn’t have proper lighting or visual merchandising and has just one small bulb, a 10 watts bulb reminiscent of the olden days when they would run the business in almost pitch darkness with oil lamps. And it is no surprise that people queue up outside the shop from early evening to get their prized pick.

In today’s world of loud and glossy branding, insane amount of money being showered on advertising, needless to say the innumerable new age food businesses which are hyper funded and get so much of PR, shops such as these have carved a niche for themselves. To survive in 21st century in Retail without even a registered brand name, operate just for a few hours in the day (or evening) and managing with just One SKU – I personally think that there is more to this Retailer than just the Halwa itself.

I managed to get some Halwa for myself the previous evening through a friend before I visited the place next day (since it is closed all day) but couldn’t meet the owners and the family that runs the place although I plan to meet them soon. It was a sense of pride and satisfaction that Retail is a very simple business to be in. Keep the fuss away, focus on your product and be consistent with what you do – customers will reach you no matter what – these are some of the learning that I take away from this specialty food retailer. As I always say, Organized Retail has so much to learn from traditional Retailers and this is just one such example.