Breakfast is good for health, bad for business

Posted by fshsfhsfh on Friday, July 29, 2011

A number of restaurants try offering breakfast as a unique offering.

The rationale is typically this - "No restaurants in my city offer breakfast for customers - you either have the low cost local joints (like the Sagars/Darshinis) or the hotel buffets (priced at around 400-500 bucks). I think there is potential to offer good breakfast at around 100-200 bucks and make money. No one else in doing it. So my restaurant will be unique and I will make some money".

The restaurant launches breakfast as an offering and withdraws it within a few days. I have seen this movie play out so many times that it I feel bad and frustrated at the same time.

I don't believe that there is a market in India for restaurants to offer breakfast, outside of very selected pockets/areas. Why?

1) Eating out is still an event in India - unlike in the developed world where eating out is typically the norm. So when customers want to spend money, they want to do it for the big ones - lunch and dinner.

2) Though health experts advocate eating Breakfast like a king, we still eat Dinner like a King and breakfast like a pauper. Changing this fundamental mindset if at all possible, will take several decades. Once the mindset changes, we still have the issue of getting people to pay big bucks for breakfast.

3) Breakfast items in India are generally low value items - Idly, Dosa etc. in the south, and Poha, Parathas etc. in the north. Customers are unwilling to pay 200-300 bucks for this.

4) Most of the hotels offer breakfast as a buffet to service their in-room guests. The cost of breakfast is typically included in the room rates - even otherwise the rates are quite attractive for the spread (The lavish Leela Bangalore breakfast buffet costs about 500 bucks). So the customer expectation around what he can get for breakfast for a small amount of money is huge. A restaurant will not have the volumes on an ongoing basis to do a lavish buffet, and if they don't do a big buffet, customers will not come. So it is kind of a Catch 22 situation. From a customer's perspective - "When I can get a breakfast buffet in a 5 star hotel for around 400-500 bucks, why would I want to go to anywhere else?"

5) Staffing up to support breakfast is difficult for standalone restaurants as it will require additional staff to be hired as the bulk of the staff will be needed for lunch and dinner. So any restaurant/joint that serves breakfast is typically open throughout the day so you can staff 2 shifts. Doing just breakfast makes this difficult.

I could go on with this, but I guess you get the message - don't waste time and money trying to offer breakfast at your restaurant - this will be a really tough one to crack.

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