Restaurant Battles in the East Village
On a rainy Monday evening, a group of people looking for chicken tikka masala head towards a block on East 6th Street in Manhattan. This block - dubbed Curry Row - is home to more than 10 Asian Indian restaurants. Mr. Gofur of the Raj Mahal restaurant greets them on the sidewalk and tries to usher them in. The group looks at the sitar placed against the window of the restaurant and asks if there is live music. As if on cue, sitar player Dileep Singh begins to play his set. The decision is made and they walk in. Gofur remarks, “Sometimes they come specially for the live music - and sometimes they don’t.”
The restaurants on Curry Row, mostly owned and managed by Bangladeshis, fall into two categories. The more upscale restaurants are at the street corners. They offer a full bar and charge higher prices. The second group, located opposite the Sixth Street Community Synagogue in the middle of the block, are easier on the wallet and serve only beer and wine.
Curry Row is home to Asian Indian restaurants like Spice Cove and Raj Mahal. Photo/Rashmi Raman
Raj Mahal, like its neighbors Spice Cove and Angon, belongs to the second category. While Spice Cove and Angon are trying to establish themselves under new ownership and management, Raj Mahal has been around for 15 years.
Raj Mahal’s business model hinges on competitive pricing. It has been offering prix-fixe dinners, discounts and promotional offers from the beginning. Although such initiatives have low profit margins, they still generated profits until the recession.
The current climate has not been good for business. Sales have dropped as the number of people eating out has fallen drastically. Costs have increased because of rising prices of produce and dairy. Their chicken tikka masala has been $10.95 for the past five years. Says owner Raj Mia, “If food price[s] increase, no one eats”.
Spice Cove and Angon are playing catch-up. Mr. Rehman says that there is “not much money in prix-fixe dinners, but we had to introduce it because of competition”. Spice Cove also offers the cheapest chicken tikka masala among the three - $9.95.
Angon, on the other hand prices its chicken tikka masala at $13.95. Nicolas Gomez, the manager says that the restaurant makes a $3 profit on the dish, but they need to sell 10-12 dishes of chicken tikka masala every day to justify the cost of the ingredients and the labor.
The ingredients are the most expensive component. For chicken tikka masala, it is the Garam Masala (a spice paste), heavy cream and cashew nuts that make up almost 40% of the cost.
The next highest cost is labor. Unlike Spice Cove and Raj Mahal, Angon did not need to hire chefs – the owners, Mr. and Mrs. Gomez, are the chefs. But they do need to hire servers, a sidewalk host and managers. Angon tends to hire students who have prior experience and can speak English as servers. Salaries start at $30 for a 7 hour shift plus tips.
For publicity, the restaurants rely heavily on reviews posted in news media as well as sites like yelp.com. They also use traditional practices like distributing the menu in a five-mile radius.
But nothing beats word of mouth. Lilly Magid, a customer who has visited Spice Cove four or five times, found the restaurant when she “stumbled upon this place”. She had “one meal and got attached”. She has recommended the restaurant to her friends who have also become frequent visitors.
Passers-by look at Spice Cove’s menu. After going through the menu for 5 minutes, they walked away. Business has slowed down for restaurants on Curry Row due to the current economic climate.
Photo/Rashmi Raman
The restaurants have to constantly introduce offers to interest customers. For example, customers who download coupons from Angon’s website can buy a discount coupon worth $25 for $10 to dine in at the restaurant. Raj Mahal offers a free bottle of wine or dessert with a meal. The owners are aware of the promotions offered by all the restaurants in the block.
Mr. Gofur, as the sidewalk host of Raj Mahal, plays an important role in generating sales. His job is to pull in passers-by. He uses persuasion, charm and sometimes persistence.
He spots a group of NYU students passing by and greets them with a “Hi, how are you?” He then goes on to tell the students about the prix-fixe menu “Best dishes….good for student budget,” he says. His spiel is succinct but persuasive. The students are convinced and he ushers them in.
While four years ago, he could pull in 150 customers per day, these days he can only attract around 60 to 70. On that Monday evening at 7.30, Raj Mahal was almost full, Spice Cove was serving three tables and Angon was empty.
The constant competition takes its toll, and Mr. Gomez says he’d like to sit down with his counterparts and discuss the rules of the game – pricing, ethics, viability of offers etc. While he does not want the restaurants to offer the same promotions, he feels the competition has forced Angon to come up with offers that hurt the bottom line. He argues that Raj Mahal, as an established restaurant, can afford the low prices but Angon cannot.
He approached Raj Mia and Mr. Rehman with the idea one month ago during a conversation and says that they initially thought it was a good idea. But both of them later concluded that they did not need this meeting as they were happy with the current promotions and pricing. Mr. Rehman and Raj Mia did not comment on this matter.
Notes :
NY state law does not permit restaurants within 200 feet of a place of worship to serve any alcohol other than beer and wine.
Mr. Gofur has lived in the area for 22 years. He was a restaurateur and part of this competition for 15 years before he had to sell his restaurant due to bankruptcy.
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