How much to discount the discount factor? A qualitative take on what the Indian restaurant diner is looking for.

The post is based on findings from a Finely Chopped Consulting study. Please get in touch with me at kalyan@finelychopped.net if you are in the food business and need consumer inputs on how to grow your business. I would be be happy to work with you on the same.

If you are interested in what is happening in the Indian
restaurant industry, then chances are that you might have heard about the recent imbroglio
between the NRAI (National Restaurant Association of India), which is one of the associations that represents restaurants and hoteliers, and restaurant
aggregators, specifically Zomato. If you have not, then to sum it up for you albeit a bit simplistically, a
large number of restaurants across the country, who belong to this industry
association, have taken a call to terminate tie-ups which they have with such
aggregators, in protest against the discounts, deals and other business
practises enforced by the aggregators which they feel harm their business.
Aggregators, in case you wondered, are companies that pool in existing services
and offer them to consumers without running businesses themselves. Ola, Uber, Urban Clap and Oyo Rooms would be examples from other sectors in India.

From what I gather, this boycott, which the NRAI has branded as ‘LogOut,” currently applies only to Zomato Gold. This post is not about the specifics of the standoff between the NRAI and Zomato. Nor is it about the economics of
running a restaurant. Both are subjects that I am not really qualified to talk about.

This post is about you and me. People who eat in restaurants. The diners.

Specifically, it is in reaction to a point of view on restaurant
diners which came up frequently when the recent Logout standoff was discussed. On social media and in news pieces too.  

A point of view, driven partly by the heat of the moment perhaps, which seems to almost equate restaurant diners in India with a mob knocking
at the gate of restaurants, vociferously demanding discounts, bargains and
price offs, and with no other consideration in mind.

Is that entirely so, I wondered. The argument reminded me of market research findings presentations I have been a part of during my agency days, especially to clients from abroad in the late 90s and early 2000s in sectors such as automotive, banking, telecom, etc.
They came in to the country, thinking that the only thing the Indian consumer is
interested is in the price. To realise, often the bitter way, that the
Indian consumer is a value seeker and that price is, at most, a component of this
value. Not the sole driver. 

This applied across industries. Would food be any
different? Have things changed so much?

What drives restaurant choice then? Is it just price? Or is it something more layered? 

If I take the
restaurants that I frequent in Mumbai for example, and look at what makes me do so, then
the answer is very clear. First and foremost, it is the food. The second is the
promise of being able to have a good and comfortable time when there. The definition of this would differ from person to person A bigger factor
for me than the ambiance, is the warmth of the staff and the sense of involvement and pride that the restaurant they work in evoke, and trust me, this comes through
easily through their behaviour and their body language. It could be the presence of the owner day
in and day out at the restaurant which reassures one. Think Ling’s Pavilion or Khane Khaas or Ideal Corner or Apoorva or Seefah in Mumbai for example. For larger places or
chains such as say SaltWater Cafe and Oh! Calcutta, where the owners are not on site, it could be the warmth of the service
staff that does so and the presence of familiar faces specifically. Places such as Soam, La Folie and Candies in Mumbai offer both. The owner could be there at times or else it is a constant set of staff members who know the restaurant in and out as do they know their regular customers.  Or it could even be the presence chefs whose focus on the job would be
visible to you if you are at a new age place with an open kitchen. Indigo Deli in Bandra comes to mind. As it would
be at a street corner joint with an ustad manning a tandoor or a tava at the
front such as Haji Tikka or Panchan Puriwala. In old school places where ‘chefs are meant to be seen not heard,’ it it is the consistency of the food coming out of the kitchen that is a salute to the faceless masters working inside and the soundness of their craft. 

What is non-negotiable for me, is the quality of the food on
offer; and that of the human touch. Yes, I look at the price range too, or other
deals too and why should not one? We all want to make our Rupee to
work hard. Just, as I am sure do those who run restaurants or restaurant aggregator
companies do. I use Swiggy to order in a lot these days rather than go out. I feel pleased when I see that a restaurant that I have chosen offers a discount. The fine print then shows me that they might have added a ‘restaurant/ packaging’ charge to even out the commission paid to Swiggy/ Zomato so it is not really a gain! I spent 48 hours in South Mumbai recently on a staycation with my wife. We went to five restaurants that I have not been to ever (or recently) to try them out. Only in one case, was a discount available (Eazydiner Prime). That made us happy but was not what had driven us to the restaurant.

‘But you are obsessed with food. You write about it for a
living. It is different for you. You are not a youngster anymore, you might tell me. ‘Discounts are what
‘regular’ folks look for, and above everything else.’

I decided to do a Bachchan in Hum and brought back the market researcher in me as I reached out to the consumer
to see what they had to say on this. Their take is often very different
from what the client’s is as I have learnt over the years. I spoke to
a few people I know who eat out often. Largely in Mumbai. Both men and women. Those who are in the age
group of 25 to 45. An age bracket that covers those who eat out regularly (the
younger ones in the band but working folks still with their own income) and those who are high spenders (corporate fat-cats).
I searched desperately in my phone book to find people I know, who are not
involved with the food business in one way or the other… no bloggers, Instagrammers,
journalists, restaurant owners, chefs… in the process, I realised that I need
to expand my social circle a lot more! 

I asked them about the restaurants that
they like to revisit often and the reasons for the same. Repeat visits and
willingness to recommend, are after all the best measures of brand loyalty. Especially when done in private, where this is no posturing required.

The answers that I got were amazingly consistent and so relatable too. If one takes location and convenience aside (a big factor in Mumbai), it was food that
seemed drive them folks to their favourite restaurants. For many, this could
even be the promise of a specific dish. This held true for fine dining places or trendy resto-bars in town (the more older ones among
those I spoke to) or the old school regional eateries and the dive bars (for the
younger folks) too. Their definition of ‘good food’ could vary from yours but in
their head, they were not willing to compromise on what mattered to them. That is how they calculated whether the price paid for the experience was justified.

They looked for warm and professional service too, they
added. And, consistency in both. Some used discount cards or looked for happy
hours no doubt, but that was rarely the driver of choice. 

This does not define the entire market of course. What I
just shared is based largely on talks with folks in Mumbai who share a similar
socio-economic profile with each other. This cannot be extrapolated and I am sure that restaurant owners would have specific data which would be the base of their own conclusions on this.

There would of course be a segment that looks at just
discounts and bargains and nothing else. I cannot say how big that segment is. There are
statistical segmentation tools that can size that, but if I was to back my
instinct, I would say that it is the expectation on the quality and
consistency of food, followed by service, that still drives the market to a large extent. At least in the mid to premium segment and in Mumbai.

As I said earlier, the issue between NRAI and the
aggregators/ Zomato Gold is a very specific one and this post is not about that. It is about what the Indian restaurant diner wants. Concluding in frustration, that only deals and discounts matter to the Indian diner, would do a great disservice to all ends of the restaurant ecosystem. The customer and restaurant owner both. 

Focusing
on price alone would leave the restaurant industry much poorer and I hope that the
discussion moves back to creating great food once again soon while the specifics of this case gets worked out. Call me a hopeless romantic if you want, but I do feel that it is the aberrations on both sides that go viral and make it to memes. That life finally comes down to what is called the Middle Path and why would eating out by any different? Yes, price and therefore discounts matter, but it is the quality of the food that still stands supreme and we do love restaurants that offer us that. There are some values that they never go out of fashion and quality lies at the top of that list.

I will finish this post with some consumer quotes the way one would in qualitative research presentations. The following are a set of quotes from folks I spoke to on the restaurants that they go to and top of mind reasons for why they do so. As you can see from the spectrum of restaurants mentioned, they represent people across the age band as well as geographies of Mumbai. None of what is below is a reflection of my take on the restaurants mentioned. Nor are they definitive statements on the restaurants mentioned. They are just indicative in nature and I have shared these to highlight a point. In the spirit of market research, I have kept the identity of the respondents anonymous. Each quote is of a different person.

1. “Mumbai would be Urban Tadka and Cafe Delhi Heights. Location and food in that order.”
2. “Grandmama’s Cafe, Madras Cafe, Doolaly, Le Cafe. Consistent taste of food over the years (MC). Fusion food offers (GMC). Facility to play board games and chill with friends.” 
3. “Olive. Good vibes and close by. Yautcha, best dim sum. Easy to get bookings. Nara Thai. Thai is my favourite cuisine and they do it well. Would love to go more often but tough to get bookings.
4. “Borivali Biryani Centre. Tasty food. Good service. Global Fusion, vast spread in buffet. Good service too. Asia Kitchen by Mainland China, tasty food. Prakash in Dadar, authentic Maharashtrian food and they have maintained the taste over the years. Delhi Darbar (Grant Road). Well cooked, tender meat.”
5. “Bayroute, Indigo Deli (Bandra), Oh! Calcutta (Lokhandwala), Hemant Oberoi’s. We find them to offer value for money, informal places unlike those which are stuffy and have lot of attitude, great and earthy food, simple and tasty, predictable and attentive service, wide range of dishes in the menu.”
6. ‘Toast & Tonic, O’Pedro, Uno Mas. Great food and bar. Plus close to where I work. We do make more frequent visits if a place has Zomato Gold specially if expensive.”
7. “Mc Donalds. My daughter loves the fries and soft serve AND the staff is very good at handling children. Banana Leaf when we want south Indian and the butter dosa takes care of the child. Indigo Deli for ambiance and white sauce pasta and marinated broccoli. Flag on Malad Link. They offer all cuisines and get things right. Sodabottle for egg dishes, bakery items and the old school feeling.’
8. “Smoke House Deli. Their wild mushroom risotto is great and they serve Chandon. Cin Cin for the ambiance and food. Yautcha for the great pan Asian selection. Foo for their mouth watering food. Pizza Express and Gustoso who do great pizzas. Zomato Gold is used for drinking plans to be honest.”
9. “Slink & Bardot, Seefah, Ling’s Pavilion. Innovative and great food. Location helps.”
10. “Jim’mes Kitchen, Genuine Broaster Chicken, Independence Brewing Co, the myriad Mangalorean lunch homes. I visit these because of the attention they give to flavours in the food and the quality of ingredients and recipes in their signature dishes, consistency of flavours and the value for money they offer. My Sat night drinking plans evolve around Zomato Gold.”
11. “Bombay Salad and ‘healthy’ comes to mind no matter what I have there.”
12. “Royal China, Yautcha, Izumi, O’Pedro, Bombay Canteen, Mustard, Nawab’s kebabs (Kurla), Smoke House, Salt Water. Consistently great food. Good service.”
13. “Bastian (brilliant seafood), The Bombay Canteen (ambiance and good Indian fusion), O’Pedro (ambiance and nice Portuguese food), Oh!Calcutta (great home cooked food), Trishna (best crabs in town).
14. “I love to explore new places than go revisit the same. Same places I have revisited and why are as follows. Jam Jar Diner – their breakfasts are amazing and there is a dearth of good breakfast places around.”
15. “Izumi – only pace in Bandra serving authentic bone broth ramen. Bombay Salad – best salads and value for money. Salt Water Cafe and Indigo Deli, Bandra. Classic and reliable. Good food always. Other choices are based on fads but these I keep returning to.”
16. “I like to go to Nutcracker, Papa Roti and La Folie for breakfast. La Folie and Papa Roti offer a good selection of breads too. Along with good food they have a unique ambiance too. Other than this, it would depend on who I am going with and what cuisine they like.’
17. “Punjabi by nature, Dhaba by Claridges, Swagat and Moti Mahal. Food, hygiene and ambiance.” (Gurgaon)