In-mall restaurants feel the recipe is no longer working

The honeymoon between restaurants and shopping malls appears to be coming to an end in Kolkata's retail sector.

Retail sector analysts say that the trend of having mainline restaurants inside shopping malls that was seen when the first malls came up in the city are becoming less attractive to restaurants for fairly obvious reasons.

As a result, some high-profile restaurants located at present inside malls were considering the option of either moving out sr setting up parallel establishments as standalone outlets to overcome their problems.

At the heart of the problem was the issue of the brand value of the restaurant, which was being diluted if not completely subjugated by the brand of the mall.

According to top sources in the city restaurant business, the eateries were losing out in building up their brand if they were located inside malls.

"Without fail, restaurants inside malls have their brand diluted by that of the mall and to that extent they will not reap the same benefits that a successful standalone restaurant can hope to gain as a brand if located outside", said the sources.

There was a material side to the problem as well- in many cases the relationship between a mall and the restaurant was governed by a revenue sharing relationship under which the title or physical ownership of the restaurant actually belonged to the mall.

"In other words, the situation was that the restaurant was paying the mall through a combination of guarantee charges, user costs and a cut on their revenue but had no tangible or bankable asset to show for such a pay-out", said the source.

For successful restaurants this was a problem because they felt that the revenue outgo without matching gains in terms of ownership title was not acceptable.

"The restaurants which rushed in to set up shop inside malls in the early days in Kolkata forgot some basics in the restaurant business - for example that a good frontage on a street and independent identity were two of the most important assets in the business", said the owner of several leading restaurants on Park Street which enjoyed frontage, strong brand identity and ownership title as well.

In-mall restaurants were inevitably tucked away inside a complex where the restaurant title board jostled for space and visibility inside a mall corridor rather than on the main road.

"This has happened because malls were typically bound by agreements with the anchor tenant at the establishment to provide exclusive signage on the exterior or at the very least an overwhelming visual presence to the anchor tenant", said sources.

Mall timings were proving to be irritants in certain cases as well.

For example, a leading restaurant recently found that it virtually impossible to offer a breakfast at the establishment or go in for new timings for dining as it was impaired by the timing restrictions of the mall itself.

"While this problem could still be overcome through negotiations, problems like brand dilution and inadequate returns on revenue were too basic to be sorted out easily", said the sources.