According to Anjan Chatterjee of Speciality Restaurants the third quarter showed a marked improvement after many sluggish quarters.
Anjan Chatterjee, founder & MD of Speciality Restaurants that owns the flagship brand Mainland China says the overall demand in the past few months have shown a good trajectory on back of easing in food inflation.
According to him, the third quarter showed a marked improvement after many sluggish quarters, and so expects revenues to expand with improvement in dynamics and seasonality.
All the four brands launched in 2014 that is Sigree Global Grill,Café Mezzuna ,Mainland China Asia Kitchen have shown satisfactory performance, says Chatterjee.
Some of its other brands are Oh! Calcutta, Sweet Bengal, Machan, Flame & Grill, Haka.
The company has also acquired Love Sugar and Dough, which according to Chatterjee is catching up.
Below is the transcript of Anjan Chatterjee’s interview with Latha Venkatesh & Sonia Shenoy on CNBC-TV18.
Latha: How is the business and demand looking up?
A: Historically, this is been the best period and this year has been extremely good this period. In fact on the week days leading to the December 31 and the January 1, everyday has been extremely good. We have been seeing a very good demand surge.
Latha: Many formats like yours had seen a troughing of demand in the previous few months. Do you think that troughing is over and things are picking up on a year and year basis?
A: The overall demand is showing a better trajectory but more than that we had a double whammy because the food cost, the food inflation had hit us very badly. Now that the food inflation is cooling down, we are renegotiating prices.
However, demand is growing and I expect it to be better and better. In fact these three months have been the best and going forward we would like this to be continued, the same trend. The good thing is that in terms of food inflation cooling down has been great news to all restaurants and the food and beverage outlets. Going forward that balance is extremely good.
Latha: Are you offering discounts because food is cheaper?
A: We do not discount our brand ever. We have a privilege card, we have a mileage system like the point system so which you can go and redeem those points but then we never discount our brand.
Sonia: Which are the brands that have done better than the others? Is it just Mainland China or other brands also looking good?
A: Mainland China in fact have been consistently showing better results and in fact because of the food inflation going down the balance of imports that we have actually made better in terms of the mix of local ingredients which have been replaced with the international ones and we are using our imports license so that has helped us.
Secondly, all the new brands which we have launched in the last one year which is Sigree Global Grill (hange of Sigree to Sigree Global Grill), then Hopipolla, Mizuna and the Mainland China Asia Kitchen. Fortunately, for us all four of them have done very well with the consumer and they are all showing very good results.
Latha: You have grown at a pro-rata of 17 percent in the first six months for which we know your numbers. However, that 17 percent revenue has been accompanied by a 4 percentage fall in the margins. How will both these shape up in the second half?
A: It will much better because in anyway the revenue will be more compared to the last quarter hopefully because of the kind of trend that we are looking at.
Latha: Compared to the last quarter it will always be better because this is the busy season but will the second half compared to the second half of last year look better than 17 percent?
A: It should be better because of the fact that this inflation factor in terms of the EBITDA numbers will be better hopefully as we will be able to add back lot of money through the negotiation and the inflation of the food which is cooling down.
Sonia: You also recently acquired a majority stake in Love Sugar Dough (LSD) tell us about the bakery business? What kind of revenues it will contribute to your overall revenue stream?
A: There are not too many of these organized bakery stores. If you see that there are regional players so what we intended doing is that by associating with LSD which is a very good cake brand, their cupcakes are truly to die for.
Love Sugar Dough as a brand had potential but they did not have wherewithal to go national. So, we thought that they could be a great synergy and we think that going forward we should be doing around 50 stores in next one and a half years. We have already t a detailed plan because it is a very low capex business.
With regards to Sweet Bengal the reasons we did not expand beyond Mumbai territory was because of the fact that we did not want to go into a business which beyond next five years would necessarily not have the similar kind of growth; which will just become may be seasonal in next five–ten years. However, Love Sugar Dough has the capacity to go across and the market is huge.