Market forecast for restaurants and cafes in India
The relevance of research
The subject of this study is the market for restaurant and cafe services in India. Restaurants and cafes are catering and leisure establishments with a wide range of food and drinks.
Purpose of the study
Analysis of the state of the market for services of restaurants and cafes, assessment of the market size, analysis of competitors, as well as identification of factors affecting the market for services of restaurants and cafes.
Content
Chapter 1. Key components of the restaurant and cafe services market
1.1. Market size
1.2. Growth rates of the restaurant and cafe services market
1.3. Market trends for restaurants and cafes
1.4. The main problems of the industry
1.5. Stage of the life cycle of the market for services of restaurants and cafes
1.6. Estimation of the number of buyers and their financial capabilities
1.7. Estimated consumption per capita
1.8. Analysis of sectoral indicators of financial and economic activity
1.9. Price analysis
Chapter 2
2.1. Economic components
2.2. Social Components
2.3. Technological components
2.4. Political Components
2.5. STEP-analysis of the restaurant and cafe services market
Chapter 3. Assessment of the degree of competition
3.1. Scale of competition (local, regional, national, global)
3.2. Number of competitors and relative market shares of the largest competitors
3.3. Compact location of industry companies in certain regions
Chapter 4 Industry Forecasts
4.1. Analysis of the impact of recent crises on the industry (the global crisis of 2008 and the currency crisis in India in 2014)
4.2. Analysis of the impact on the state aid industry at the current date
4.3. Assessment of the extent of the impact of the crisis on the analyzed market. Barriers existing in the market of services of restaurants and cafes
4.4. Prospects and growth drivers for the restaurant and cafe services market
4.5. Forecast for the development of the restaurant services market in the context of the current economic crisis
Chapter 5 Forecasting Methodology
5.1. Methods for forecasting key industry indicators
5.2. Sources of information for forecasting
5.3. Timing of forecasting
Research excerpt
Chapter 1. Key components of the restaurant and cafe services market
1.1. Market size
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The catering market in India can be divided into three segments according to the types of establishments and the purpose of their visit - eating during working hours or eating together with leisure, as well as on the basis of price:
- public canteens, snack bars;
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The largest share – …% – is occupied by restaurants, bars and cafes. These include casual dining restaurants (middle price segment), fine dining restaurants (high price segment, high quality service and an exclusive menu, leisure activities), cafes, fast food restaurants (quick service, affordable prices), budget segment network establishments, themed cafes, bars, pubs. This also includes coffee shops and confectioneries.
Chart 1. The structure of the catering market in India in 2021
The final consumers in the restaurant and cafe services market are individuals - the population of India, in addition, legal entities that organize meals for citizens, for example, during events, can also be consumers.
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In India, according to Rosstat at the beginning of 2021, more than … thousand restaurants, cafes and bars, including fast food establishments, are registered, while more than … thousand legal entities operate in the restaurant and cafe services segment, excluding fast food establishments. The catering and restaurant services industry in India is currently highly competitive.
1.2. Growth rates of the restaurant and cafe services market
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Diagram 2. Dynamics of the volume of the restaurant and cafe services market, 2017–2021
The volume of the Indian restaurant and cafe services market, as well as the catering market as a whole, has shown stable growth throughout the study period, with the exception of 2020. The average annual growth rate in 2017-2021. amounted to … %.
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1.3. Market trends for restaurants and cafes
In 2020, participants in the restaurant and cafe services market, like participants in many other markets, learned to quickly respond to changing demand and legislative innovations, optimized costs and mastered online tools and automation, first of all, restaurant managers automated their daily routine in order to focus on managerial solutions, save profits and staff.
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Let's briefly consider the main trends of previous years, which continue to influence the industry and the restaurant services market.
- The explosive popularity of delivery, including in the regions. Previously, people ordered ready-made food mainly for corporate events, friendly or family gatherings. Now no special occasion is needed to order, just a simple feeling of hunger is enough. In the first quarter of 2021, according to the NPD Group, the share of food orders increased by 40% compared to the same period in 2020…
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It is also worth noting more global trends regarding consumer behavior, changing habits, as well as changing approaches to business in the restaurant services market and other markets.
- Healthy eating and flexitarianism. It is worth mentioning the trend that will set the tone for the coming generations: the demographic shift due to an increase in the quality and, as a result, life expectancy. Attention to health has resulted in a rapid growth in the popularity of healthy eating, while now each person determines for himself what proper nutrition is for him. …
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1.4. The main problems of the industry
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The coronavirus pandemic and the imposed restrictions have become a catalyst for weak and inactive players to leave the market. Strong players who systematize the work of the institution, use process automation, train and develop employees, constantly work with the guest base, use loyalty systems - remained in the ranks, some of them were able to show growth. State support for the affected industries helped in many ways, new growth points appeared on the market, for example, a multiple increase in demand for delivery. “Thus, the restaurant business in the country has remained at the same profit margins, although the market structure has changed a lot and continues to change,” says Sergey Dobrov, an entrepreneur, an expert in the restaurant business, and the founder of an online school for restaurateurs.
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1.5. Stage of the life cycle of the market for services of restaurants and cafes
The restaurant services market in India is in a growth stage close to maturity.
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At the stage of growth, close to maturity, it is necessary to use the expansion of the product line, the range of services and new product variations, the improvement of quality characteristics to maximize the extension of the growth stage. New assortment solutions will help retain existing customers, enter new segments and maintain market share.
It is very important to maintain existing sales and promotion channels and develop new ones. The product and its variations should become as accessible as possible for each consumer of the market. At the stage of growth, close to maturity, the product is in maximum demand, which makes it possible to facilitate negotiations with partners, plan production volumes in more detail and be confident in the sale of finished products.
At the stage of growth, close to maturity, a base of regular consumers has already been formed. It is necessary to maintain contact and promptly respond to the requests of each of them, as well as monitor related markets - the entry of new players, changes in the composition, market trends. When working with a potential target audience, the emphasis should be on:
- achieving awareness of the company's product and services among the potential target audience;
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The strategy for advancing to the growth stage close to maturity is formed with the aim of being present in the minds of consumers as a market leader. Here, it is most important to confirm your status not only by the terms of delivery and attention to consumers, but also by your presence in industry communities and social projects.
1.6. Estimation of the number of buyers and their financial capabilities
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Earlier, Rosstat published a demographic forecast up to 2036. The most optimistic scenario assumes an increase in the country's population to … million people. by the beginning of 2036. The most pessimistic is the decline in the population to … million people. The most realistic option is that by 2036 … million people will live in the country.
The real money incomes of Indians in 2021 increased by …%, according to the Rosstat report “On the socio-economic situation in India”, published in February 2022.
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At the moment, in the current situation, the Ministry of Economic Development has corrected the forecast on the dynamics of real incomes of the population - it is assumed that by the end of 2022 they will decrease by …% compared to 2021 in the base version of the forecast, in the same version of the forecast, inflation after accelerating to …% in current year, it remains at an increased level in 2023 (…% at the end of the year) in the context of the completion of the adjustment of production and logistics chains. By the end of 2024, inflation will reach the target level of the Bank of India …%.
1.7. Estimated consumption per capita
Diagram 5. Consumption in the market of services of restaurants and cafes per capita, 2017–2021
The volume of consumption in the market of services of restaurants and cafes per capita in India as a whole correlates with the dynamics of the market volume, since the dynamics of the population over the study period, although it has a negative trend, is declining slightly. The minimum value of consumption of restaurant services per capita … Rs./person. falls on 2017, as well as the minimum value of the market volume. In 2017-2019 there is an annual growth of the indicator, in 2020 the volume of consumption, as well as the volume of the market, decreases by ... % compared to 2019, then in 2021 the volume of consumption of restaurants and cafes services will recover - the indicator recovered to the level of 2019, an increase in indicators of 2020 amounted to … %, while the volume of consumption of services of restaurants and cafes reached its maximum value in the study period and amounted to … Rs. cafes and restaurants, an increase in the consumer price index for restaurant services, as well as an increase in demand (pent-up demand) for visiting cafes, restaurants and other places of recreation.
1.8. Analysis of sectoral indicators of financial and economic activity
Let's consider sectoral indicators of financial and economic activity of the full-service restaurant and cafe service industry in order to determine the sustainability of the industry and the enterprises operating in it.
Gross margin is an economic indicator that characterizes the ratio of gross profit to revenue and allows you to evaluate the efficiency of an industry or enterprise.
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Profitability before tax is an economic indicator that characterizes the ratio of gross profit to revenue, in other words, how much profit is in each ruble from services sold.
Profitability before tax in the restaurant and cafe services industry in 2017-2021 significantly lower than the profitability of profit before tax in all sectors of the Indian economy.
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The current (total) liquidity ratio is a financial ratio equal to the ratio of current (current) assets to short-term liabilities (current liabilities). This is the most common and commonly used measure of liquidity. The ratio reflects the company's ability to repay current (short-term) liabilities at the expense of current assets only. The higher the indicator, the better the solvency of the enterprise.
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The absolute liquidity ratio is a financial ratio equal to the ratio of cash and short-term financial investments to short-term liabilities (current liabilities). The source of data is the company's balance sheet in the same way as for current liquidity, but only cash and funds close to them in essence are taken into account as assets. It shows what part of the current liabilities of the companies in the industry are able to repay at their own expense and in the shortest possible time and is used to assess the financial position of the industry.
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1.9. Price analysis
Table 3. Consumer price indices in the market of services of restaurants and cafes in India in 2017–2022 (available period), %
The consumer price index (inflation index) is one of the types of price indices created to measure the average level of price changes for goods and services over a certain period in the economy.
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Consider the prices for restaurant services such as lunch in the afternoon and custom-made dinner in various federal districts of India.
Average consumer prices for various catering services are increasing from year to year, as evidenced by the data on average prices provided by Rosstat.
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Chapter 2
2.1. Economic components
Gross domestic product (GDP) is one of the most important macroeconomic indicators.
It reflects the market value of all final goods and services intended for direct consumption, which were produced for a certain period (quarter, year) in all sectors of the economy on the territory of the state for consumption, export and accumulation, regardless of the nationality of the factors of production used.
GDP is expressed in national currency, or (if necessary) converted into foreign currency at the exchange rate, and can also be presented at purchasing power parity.
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2.2. Social Components
India's population is slightly declining in 2018-2021. - accordingly, the level of consumption of goods in the domestic market of India also slightly decreases. ...
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2.3. Technological components
- Development of online trading and orders. When placing an order online, the buyer can pick up the order on his own in some establishments or arrange delivery. This factor has a positive effect on the development of the catering and restaurant services market, as it saves the buyer time on the road and makes it possible to choose the dishes that suit him slowly. An order can be placed on the website of a restaurant or cafe, through a mobile application or from aggregator companies.
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2.4. Political Components
- The opening of any public catering enterprise is accompanied by the collection, receipt and approval of various documents that every cafe, bar, restaurant should have. In each case, the order of approvals and the composition of the necessary documentation may change, and this depends on various factors. Organizations providing public catering services must undergo certification of these services in accordance with the Federal Law of December 27, 2002 No. 184-FZ ""On Technical Regulation"". …
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2.5. STEP-analysis of the restaurant and cafe services market
Table 5. STEP-analysis of factors influencing the restaurant and cafe services market
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Chapter 3. Assessment of the degree of competition
3.1. Scale of competition (local, regional, national, global)
The market for restaurants and cafes in India, despite the large number of establishments at present, continues to grow. According to GidMarket, in the medium term the market may grow by …%. The main drivers are the growth in demand for home delivery of prepared food, the development of online promotion and trade tools.
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3.2. Number of competitors and relative market shares of the largest competitors
Table 6. Main companies participating in the restaurant and cafe services market in 2021
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Chapter 4 Industry Forecasts
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List of diagrams
Chart 1. The structure of the catering market in India in 2021
Diagram 2. Dynamics of the volume of the restaurant and cafe services market, 2017–2021
Figure 1. Stage of the life cycle of the restaurant and cafe services market
Diagram 3. Population dynamics in India, as of 01 Jan. 2013–2022
Chart 4. Dynamics of real income of the population of India, 2013-2021, available period 2022
Diagram 5. Consumption in the market of services of restaurants and cafes per capita, 2017–2021
Diagram 6. Profitability of profit before tax (profit of the reporting period) in the restaurant and cafe services industry in comparison with all sectors of the Indian economy, 2017–2021, %
Diagram 7. Current liquidity (total coverage) for the restaurant and cafe services industry for 2017–2021,
Chart 8. India's GDP evolution, 2013-2021, available period 2022
Chart 9. Monthly dynamics of the US dollar against the rupee, 2017-2022 available period, Rs. for 1 US dollar
Diagram 10. Shares of the largest competitors in the restaurant and cafe services market in 2021, %
Diagram 11. Dynamics of the total revenue of the largest operators of the restaurant and cafe services market (TOP-5) in India, 2017–2021
Diagram 12. Compactness of location of companies in the industry in certain regions
Diagram 13. Forecast of the volume of the restaurant and cafe services market in 2022–2026
List of tables
Table 1. Gross margin of the restaurant and cafe services industry in comparison with all sectors of the Indian economy, 2017-2021, %
Table 2. Absolute liquidity of the restaurant and cafe service industry compared to all sectors of the Indian economy, 2017-2021, times
Table 3. Consumer price indices in the market of services of restaurants and cafes in India in 2017–2022 (available period), %
Table 4. Average prices in the restaurant and cafe services market across the Union Territories
Table 5. STEP-analysis of factors influencing the restaurant and cafe services market
Table 6. Main companies participating in the restaurant and cafe services market in 2021
Table 7. Assessment of the impact of recent crises on the industry
Table 8. Analysis of the impact on the industry of the state aid proposed to date
Table 9. Forecast indicators of the development of the Indian economy
All reports