Ahmedabad’s once-flourishing pizza huts seem to have lost their appeal, with 80 to 100 pizzerias shutting down, claims a media report.
Pizza demand has declined following the dietary preferences of the health-conscious, who are conscious of their calories intake. The restaurant industry is also plagued by intense competition, spiralling operational costs and online orders preferences.
According to the report, in addition to pizzerias, a number of large-format restaurants that can accommodate more than 100 people have closed as meal delivery apps have supplanted traditional dine-in experiences.
The city’s desire for pizza peaked a few years ago, but current patterns suggest that it is already declining. In 2022–2023, there were about 400–425 pizza places; now, there are only about 325–350.
Part of the reason for this drop is a plateau in demand on account of small menu selection and growing labour and raw material expenses that have reduced profit margins.
Cafes are also experiencing a shift in client preferences, with the youth favouring healthier, lower-carb and less-sugar offerings. In fact, demand for food items, particularly those involving bread and baked goods, has fallen by 30–40% in the last six months, as customers increasingly avoid such items in favour of health offerings, the report added.
The popularity of online food delivery continues to eat into walk-in business. While fast food, including late-night orders for pizzas and burgers, has gained traction, restaurants with large seating capacities have struggled to maintain consistent foot traffic, particularly during weekdays.
Large-format restaurants often see full occupancy only on weekends, while smaller restaurants with seating for 50 or fewer are able to endure better, thanks to lower rent and labour costs.
The growing competition in the city has further complicated matters. With over 10,000 food outlets now operating in Ahmedabad, an increase of 20-25% from pre-Covid levels, many large-format restaurants have been unable to compete and have closed in the past six months. This increased competition is further contributing to the strain on the industry.
While festive seasons still drive food demand, fast-food joints continue to outperform traditional dining establishments. Late-night orders for fast food remain high, but walk-in numbers are down due to the dominance of online delivery platforms. Premium restaurants, however, are still performing relatively well as consumers are willing to spend more on innovative dining experiences.
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