The great service charge mystery
The issue of tips is something which no one has studied in India. This has serious implications on the quality of service we get.
Facebook discussions have now become my most important source of news and I'll tell you why. Just the other day, I initiated a chat, which snowballed into a debate, and I got to know that restaurants keep 50-60 per cent of the service charge they collect from you.
This fact was confirmed by two restaurant consultants who participated in the discussion and I found it really cheap of restaurants not to disclose it. The discussion was triggered by a U.S. survey, which has reported that an overwhelming majority of guests at full-service restaurants no longer leave behind a 20 per cent tip/service charge, a long-time industry norm.
Only 23 per cent of the survey respondents said they fork out 20 per cent and above; 29 per cent stick to 10-19 per cent; 35 per cent pay less than 10 per cent; and a surprising 11 per cent admitted to parting with no money, which I find a little hard to believe in the light of the number of horror stories I have heard about waiters in America being plain nasty with customers in case they forget to pay! Such reports are coming out almost daily in the U.S. because hospitality industry compensation issues have gathered importance following union actions last year for a 'living wage' across America's super-sized fastfood sector.
In India, no one I know has studied the issue, which has serious implications on the quality of the service we get. To get the local picture right, I turned to Raminder Bakshi, my go-to person for information on the restaurant sector.
Bakshi said two models of service charge distribution are in place in restaurants. One is the 50:50 model, where the employer keeps 50 per cent for employee pick-ups and drops and breakages in the kitchen and the front of the house (restaurants owners I spoke to insist they don't factor these in while determining menu prices).
The other model is 40 per cent for the management (to be spent on "staff welfare"!), 40 per cent for the staff and 20 per cent for the safety net for breakages. In most restaurants, all employees, from the toilet attendant to the dishwasher and the maitre d', get a percentage of the pickings determined by the 'service points' they accumulate over the month.
This doesn't help the customer because the points system essentially rewards waiters who 'upsell', or talk their guests into buying more expensive dishes or alcoholic beverages.
It also doesn't help the restaurant managements because it leads to avoidable heartburn down the line, for no one is happy with what he or she gets at the end of the month. And then there's the eternal question: Shouldn't employers be investing in the happiness of their staff to get the best service out of them, rather than making them pay for their night pick-ups and drops?
Five-star hotels generally don't levy a service charge, though some do it for banquets. It was The Oberoi Group that first initiated this practice, because, as the chain's corporate chef, Soumya Goswami, puts it, "When you come to a five-star hotel, you expect the best service. How can we charge you for it?" My pitch is that we go back to the days when tipping was discretionary. Only then will restaurants fulfil their statutory obligations, and their staff will go the extra mile.
New players liven up breakfast market
For the second year in succession, McDonald's celebrated National Breakfast Day, which is its own invention, on March 24 by handing out a thousand McMuffins gratis to early-bird customers at each of its five designated outlets in Delhi-NCR.
The chosen five even test-marketed the idea of an all-day breakfast served from 8 a.m. to 6 p.m., taking a leaf out of similar packages offered by five-star hotels to cater to the requirements of the many body clocks of their international patrons. The 'out-of-home breakfast' may seem to be an idea alien to India (why would anyone want to have breakfast at McDonald's when you can dig aloo parantha or dosai at home?), but it is not as foreign as it may seem.
Breakfast offerings of Saravanah Bhavan, Murugan's Idli and MTR are established favourites; the crispy stuffed paranthas of Murthal dhabas attract carloads of Delhiites on holidays and weekends; the popularity of jalebi-and-hot milk treats at places as varied as Jodhpur, Lucknow and Varanasi shows no signs of diminishing; and Purani Dilli's bedmi-aloo is worth a trip to Chandni Chowk, especially on a Sunday.
McDonald's is simply tapping into this market, and restaurateurs offering breakfast share the fast-food chain's confidence in this segment of the organised market. The All-American Diner at Habitat World took the lead about 15 years ago by unveiling a breakfast offering.
Today, says Old World Hospitality's F&B Director Rakesh Anand, 175-200 people have the Diner's breakfast daily between 7 and 11 a.m. Most of them are Lodi Garden walkers or expats on their way to office. The number goes up to 250-300 a day on weekends.
This market has moved away from bedmi-aloo to Eggs Benedict, the best-selling item at Smoke House Deli, Khan Market, whose breakfast menu matches that of the All American Diner in both variety and quality. Sid Mathur, the man behind the menu, says the market has grown for three reasons: "Young professionals living away from their families don't have full-time help at home; people's tastes have changed; and young doubleincome couples are finding it more convenient to eat out." For this growing segment, it's not just paranthas at breakfast time.
It's pizza not Punjabi for youngistan
Mama Mia, North India seems to be saying 'bye, bye' to Chinese and going 'bhai, bhai' with Italian. You may have thought Indian and Chinese are the hottest favourites in North India, but 44.8 per cent of those who order home-delivered meals through Foodpanda.in, a Rocket Internet-incubated website operating in 40 countries across four continents, prefer Italian over Chinese, Punjabi and fast food.
Chinese has a 27.6 per cent following, but Punjabi has slipped to 6.2 per cent. The survey report doesn't give the percentage for fast food, but if you do the math, it ranks a healthy third with 21.4 per cent. That seems highly likely, with Nirula's ranking third in popularity among Foodpanda.in users after Pizza Hut (whose thin crust and cheesy pizzas top the list of favourites) and Yo! China, a chain of popular Chinese restaurants with a strong home delivery model.
Finding the survey results hard to stomach, I called up Rohit Chadda, co-founder and managing director of Foodpanda.in. "They reflect the cosmopolitan nature of the taste buds of our demographic, which is essentially the 25-35 market in Delhi-NCR, Mumbai and Bangalore," Chadda said. The takeaway and home delivery segment, he estimated, has grown to become a Rs 1,000-crore market nationally and is poised to expand to up to `6,000 crore by 2017. I can see the dollar signs in the expectant eyes of my restaurateur friends!