AHMEDABAD: The city’s pizza scene is no longer the slice of success it once was. As health-conscious diners cut back on carbs and calories, 80 to 100 pizza outlets have shuttered in the past 10 months. Rising costs, increased competition and declining footfalls have added to the challenges faced by the city’s restaurant sector.
With delivery apps replacing traditional walk-ins, the city has seen not just pizzerias but 5-6 large-format restaurants, with seating capacity for more than 100 people, shut shop, too.
“Pizza demand peaked a few years ago, but the trend has reversed,” said Nafees Hussain, owner of a pizza brand. “In 2022-23, there were 400-425 pizza outlets in the city. This number has dropped to 325-350. Demand has stagnated, partly due to a lack of variety on the menu. Rising costs, including a 25-30% increase in raw materials and a 30-40% jump in salaries over the past two years, are squeezing profit margins.”
Hussain added, “Fierce competition prevents restaurants from passing on these increased costs to customers. The introduction of GST on rent has further burdened the sector. In the past 18 months, three brands have shut their outlets entirely.”
Stavan Jani, a former master franchisee of a national pizza brand, operated eight outlets in the city before surrendering the franchise due to multiple reasons. He has since launched his own brand, with one outlet operational and another soon to open. “Six of my previous eight outlets closed,” said Jani. “While new restaurants are constantly emerging and diners are eager to explore new cuisines, the industry is grappling with razor-thin margins due to fierce competition.”
Cafes are feeling the pinch, too. Vijaysinh Rathod, owner of a leading cafe chain with seven outlets, said, “We attract many young customers and are observing a shift in their preference for healthier low-carb, low sugar options. From our menu, liquid items account for around 60% of revenue, while food items contribute 40%. However, in the past six months, we have seen a 30–40% drop in demand for food items with customers avoiding bread and bakery items.”
The popularity of online food delivery has also eaten into walk-in numbers. Late-night orders of fast food have increased, but restaurants with large seating capacities have seen footfall decline. “Margins have shrunk dramatically,” said Nipun Kanodia, a restaurant chain owner. “Large-format restaurants see footfall on Saturdays and Sundays but rarely see full occupancy on weekdays. Taxes, rentals, and manpower costs have risen, but smaller restaurants with 50-seat capacity are likely to endure as they save significantly on rent and labour.”
Narendra Somani, president of the Hotels and Restaurant Association of Gujarat, highlighted growing competition. “Ahmedabad has at least 10,000 food outlets. While many closed during Covid, the current number is about 20–25% higher than pre-Covid levels. This has increased competition, leading to large-format restaurants shutting down in the past six months.”
While festive seasons drive strong demand for food, sources say fast-food joints fare better than traditional restaurants.
Sheel Dhanani, a member of the food committee at the Gujarat Chamber of Commerce and Industry, emphasized the shift in consumer behaviour. “Late-night orders for pizzas and burgers have surged but walk-in numbers are declining due to the growth of online delivery. Premium restaurants are performing relatively well, as customers are willing to spend more on innovative cuisines.”
Ahmedabad: The city’s pizza scene is no longer the slice of success it once was. As health-conscious diners cut back on carbs and calories, 80 to 100 pizza outlets have shuttered in the past 10 months. Rising costs, increased competition and declining footfalls have added to the challenges faced by the city’s restaurant sector.
With delivery apps replacing traditional walk-ins, the city has seen not just pizzerias but 5-6 large-format restaurants, with seating capacity for more than 100 people, shut shop, too.
“Pizza demand peaked a few years ago, but the trend has reversed,” said Nafees Hussain, owner of a pizza brand. “In 2022-23, there were 400-425 pizza outlets in the city. This number has dropped to 325-350. Demand has stagnated, partly due to a lack of variety on the menu. Rising costs, including a 25-30% increase in raw materials and a 30-40% jump in salaries over the past two years, are squeezing profit margins.”
Hussain added, “Fierce competition prevents restaurants from passing on these increased costs to customers. The introduction of GST on rent has further burdened the sector. In the past 18 months, three brands have shut their outlets entirely.”
Stavan Jani, a former master franchisee of a national pizza brand, operated eight outlets in the city before surrendering the franchise due to multiple reasons. He has since launched his own brand, with one outlet operational and another soon to open. “Six of my previous eight outlets closed,” said Jani. “While new restaurants are constantly emerging and diners are eager to explore new cuisines, the industry is grappling with razor-thin margins due to fierce competition.”
Cafes are feeling the pinch, too. Vijaysinh Rathod, owner of a leading cafe chain with seven outlets, said, “We attract many young customers and are observing a shift in their preference for healthier low-carb, low sugar options. From our menu, liquid items account for around 60% of revenue, while food items contribute 40%. However, in the past six months, we have seen a 30–40% drop in demand for food items with customers avoiding bread and bakery items.”
The popularity of online food delivery has also eaten into walk-in numbers. Late-night orders of fast food have increased, but restaurants with large seating capacities have seen footfall decline. “Margins have shrunk dramatically,” said Nipun Kanodia, a restaurant chain owner. “Large-format restaurants see footfall on Saturdays and Sundays but rarely see full occupancy on weekdays. Taxes, rentals, and manpower costs have risen, but smaller restaurants with 50-seat capacity are likely to endure as they save significantly on rent and labour.”
Narendra Somani, president of the Hotels and Restaurant Association of Gujarat, highlighted growing competition. “Ahmedabad has at least 10,000 food outlets. While many closed during Covid, the current number is about 20–25% higher than pre-Covid levels. This has increased competition, leading to large-format restaurants shutting down in the past six months.”
While festive seasons drive strong demand for food, sources say fast-food joints fare better than traditional restaurants.
Sheel Dhanani, a member of the food committee at the Gujarat Chamber of Commerce and Industry, emphasized the shift in consumer behaviour. “Late-night orders for pizzas and burgers have surged but walk-in numbers are declining due to the growth of online delivery. Premium restaurants are performing relatively well, as customers are willing to spend more on innovative cuisines.”
