Speciality Restaurant to launch 4-5 new stores by Q4

Speciality Restaurants that runs Mainland China posted a 14 percent rise in revenue for the quarter ending December 31 at Rs 61 crore against Rs 53.53 crore yoy. Anjan Chatterjee, MD, Specialty Restaurants told CNBC-TV18 that the company is adding 16 stores this year.

"This year we have already done around 12, another 4-5 are coming up in one quarter that ends April, but after that we are absolutely online. There is real estate coming in and there will be the Mizunas coming in within the areas of the Mainland Chinas which have large capacity. So, we have a new model going forward and are extremely bullish," adds Chatterjee

Below is an edited transcript of Anjan Chatterjee's interview on CNBC-TV18 Q: What about your same store sales growth and how has it been? The general apprehension in the environment is that discretionary spending is coming down. Are you seeing any kind of sluggishness in your same store performance?
A: In fine dining, we do not follow that parameter. Our growth was always projected with the penetration strategy which we are doing. We are adding 16 stores this year. The geographical depth is the parameter for us, but there are pressures on the discretionary spend and that has been flattish. But that is not the parameter on which we have actually projected or that is not the parameter on which we are looking forward for our growth. Q: One key parameter is price hikes. You have not taken any price hikes. You usually do on an average of about two a year. Are you facing a difficult environment where it is equally difficult for you to put through any price increases given what you are seeing on demand?
A: Yes, because at this point of time it is important to ensure that we hold our price line and we sustain it for a period of this particular discretionary spend becoming a little better and more comfortable. In fact this would be a very wrong time, but surely by the new financial year we are taking a price hike. Also Read: Jubilant Foodworks plunges for 2nd consecutive day, down 8%
However, at this point of time we have not looked at any price increase which will be detrimental in the long-term. Also, we do not want to pass it onto the customer, because the number of times that a person is coming out to eat or even in Quick Service Restaurants (QSR) there is a pressure, so fine dining definitely gets. But in spite of all that our growth strategy is absolutely on line and we are adding number of stores. So, by the time this turnaround happens we will be having a large volume to go for. Q: Other costs have gone up for you as well, like lease rentals, material costs, staff costs. In that context and with no price hike yet, how much more pressure do you foresee on margins?
A: We do not envisage any cost increase now because we have already got a contract renewed for a period of another nine months. The inflationary trends in the economy are now slightly coming into a neutral level. I do not think there will be anymore raw material increase. Also, over a period of time we are trying to utilise our assets a little better. There are two new brands which are coming in, one is the Mizuna which is the all day dining on the lines of Delhi and is more Italian-Mediterranean inn that is just taking-off this month and existing stores that have large spaces in the 26 cities that we have.
We are intending cutting down some of them where we have an extra area of around 2,000 or 1,800 square feet. With the same asset, we would like that asset to sweat better and have another brand Café Mizuna or Mizuna coming in. Going forward in the next quarter you will see three-four of them coming in. There is another brand called the Global Grill which we are very bullish about and which has already been started and we have done the trial. This month even that is coming in. Going forward, we are trying to balance the impact with sweating our assets better. Q: What is the new store rollout plan from hereon? How much more do you see in terms of new store additions over the next two quarters?
A: We promised them to do 16 stores and that is a minimum. We are surely going to 16 and maybe another store. This year we have already done around 12, another 4-5 are coming up in one quarter that ends April, but after that we are absolutely online. There is real estate coming in and there will be the Mizunas coming in within the areas of the Mainland Chinas which have large capacity. So, we have a new model going forward and are extremely bullish.