Speciality Restaurants to expand; plans 20-30 cloud kitchens, 6 restaurants

Speciality Restaurants, which owns and operates brands like Mainland China, Oh! Calcutta, Hoppipola, will add 20-30 cloud kitchens over the next 18 months with the delivery model sustaining even with a receding Covid-19 pandemic.

The Covid-19 pandemic had sent Speciality – which operated on a dine-in model – to the drawing board. The company took a host of initiatives to make things work, from streamlining operations to cutting costs and focusing on the delivery vertical.

At one point, delivery accounted for 100 per cent of business and then came down to 60 per cent and has how stablised. Currently, it’s about 26-27 per cent of total volumes.

“It has sustained”, said Anjan Chatterjee, founder and managing director of Speciality Restaurants. Pre-pandemic, deliveries were at 7-8 per cent for Speciality.

At present, there are about 13 independent cloud kitchens, but the numbers are set to increase. One may even come up in London, where it opened ‘Chourangi’ last October. ‘Chourangi’ is a joint venture of Speciality Restaurants through its subsidiary.

Expanding the delivery model works well for Speciality as the capital requirement is low. Chatterjee said that profitability had largely come from a hybrid model.

The company’s EBITDA for Q1FY23 stood at Rs 26.39 crore as against Rs 15.92 crore, up 65.77 per cent quarter-on-quarter.

But the expansion is not just restricted to cloud kitchens. On the brick-and-mortar side, plans are afoot to add at least six more restaurants over the next 18 to 24 months, some outside India.

However, Chatterjee clarified that the focus was on profitability. “All decisions are being made on the basis of store metrics and return on investment.”

During the pandemic, Speciality streamlined its operations and closed down some of the non-profitable ones. These were the “fence-sitters”, he said.

As on March 31, 2022, the company had a total of 80 restaurants and 37 confectionery stores across 13 cities in India, two in UAE and one in London under the joint venture.

Speciality has also entered the packaged foods space with sauces.