In 2014-15, Indian Railways carried 8.4 billion passengers – more than 23 million passengers a day (roughly half of whom were suburban passengers). India’s thousands of railways stations – in excess of 8,000 at last count – comprise perhaps the greatest under-optimised retail real estate spaces in the country. While not all of them may be viable locations, many contain untapped consumption-building opportunities.
Rail travel retailing represents a significant component of many retailers’ strategy for growth globally. The Grand Central Terminal in New York city, for instance, one of the busiest train stations in the world serving nearly 200,000 commuters every day, is not only a commuter hub but is also considered a tourist destination. With 145,000 square feet of retail space, it is home to some of the world’s biggest retailers, including Apple, which selected this location to open its largest retail venue.
With the ongoing revamp of most railway stations, Indian Railways – the fourth largest employer in the world – is also gradually opening up avenues for retail environments.
Railway passengers may soon be able to purchase quality and hygienic food from some of the leading quick service restaurants (QSR) such as Domino’s Pizza, Burger King, Subway, KFC and Pizza Hut. These QSRs are reportedly planning to open stores in food courts which are set to come up on six of the major stations such as Howrah, Mumbai, Madurai, Agra, Pune and Visakhapatnam.
Companies like K Hospitality Corp, the holding company of Travel Food Services, RJ Corp, which holds the franchisee rights for Yum! Brands-owned KFC and Pizza Hut, Lite Bite Foods, among others are reportedly bidding to set up food courts at these stations.
An e-mail sent to the companies seeking responses on the development didn’t elicit any response at the time of filing this story.
Of late, Indian Railway Catering and Tourism Corporation Ltd. (IRCTC), a subsidiary of Indian railways which handles catering and tourism activity, has launched various new initiatives in all its verticals such as e-ticketing, tourism, catering, online shopping and Rail Neer. The new move, however, will not come under IRCTCs umbrella.
Last year, IRCTC launched an e-catering process, with an aim to offer food ordering services to train passengers through prior online bookings. Within the short time of launch, the initiative witnessed partnership of several privately-run foodservice majors with IRCTC.
Today, the station-based e-catering services are available on over 1500 trains and major stations. The initiative has also witnessed a jump in food majors partnership, which now includes, Domino’s, KFC, Street Foods by Punjab Grill, Wimpy, Haldiram’s, Chaayos,etc and food aggregators like Foodpanda, TravelKhana and Hello curry.
What lies ahead for Railway Retail?
Retail at railway stations is not an altogether novel phenomenon for India. Iconic bookstore chain AH Wheeler & Co (P) Ltd, which opened its first outlet at Allahabad Railway Station in 1877, later spread as small book stalls in several mini and macro railway stations across the country. After 125 years since inception, AH Wheeler now is a chain of 378 bookstalls at 258 railway stations in the country.
Currently in India, however, airports are considered the preferred locations for travel retailing, especially as a result of private operators remodelling some major airports of the country in the past few years. The T2 terminal at Mumbai’s Chhatrapati Shivaji International Airport has about 700,000 sq. ft area dedicated to retail, food and beverage, lounges and travel services. Similarly, at Delhi’s Indira Gandhi International Airport, terminals T1 and T3 house around 500 brands spread over 323,000 sq ft.
In addition, with the development of intra-city metro infrastructure, Metro stations have also emerged as viable retail spaces. Real estate majors such as Parsvnath Developers already operate Metro Malls in Delhi-NCR, while in Hyderabad, Larsen & Toubro is on course to creating a stunning retail zone at the upcoming ‘Hyderabad Next’ metro rail project.
While hygienically packaged, branded foodservice will be a key draw for rail passengers, opportunities also exist for several lifestyle categories, including gifts, toys, fashion accessories, sports and travel equipment, among others. Could this be the inception of a new retail revolution in India? Watch this space for more…