In the US, if a Starbucks coffee outlet opens in a neighbourhood then it is a sign that the place is becoming upmarket with growing incomes — and hence, an attractive real estate option. In Chennai, out of the nearly 70 outlets of Cafe Coffee Day (or CCD as it is popularly known), almost none is located in north Chennai.

For most branded fast food chains and cafes, north Chennai still seems to be a blind spot. It appears rather cut off in terms of upwardly mobile places to eat — or, as is the popular term, ‘hang out’ — indicating a market perception that some experts say is not real and, in any case, soon-to-be outdated.

The most popular consensus is that much of the population in north Chennai is working class and therefore not the ideal market segment for these outlets.

“With the exception of a handful of colleges and industries like Ashok Leyland and the erstwhile B&C Mills, there isn’t much,” says former CMDA chief planner Anantharanjan Das.

K. Ramakrishnan, president (marketing), Cafe Coffee Day, says his company looks at several aspects before deciding to locate a store in a neighbourhood. “We look at what kind of people live in the area, possible visibility for the brand, the presence of other retail brands, the price sensitivity and how viable it would be for the outlet.”

One would typically find the outlets around big shopping centres, malls, residential areas, high streets, hospitals and highways. The number of outlets, according to Mr. Ramakrishnan, is high on the OMR because of the IT Corridor, on the ECR as it is part of a highway, and Besant Nagar.

One major factor not helping north Chennai is the lack of space, says N. K. Sundaram, former chairman of Builders’ Association of India, Southern Centre. “The northern suburbs are crowded, expansion is exceedingly limited — whether it be a new hotel or apartments or shops. Even if a new outlet were to come up, what about the ambience or parking space?” he says.

When it comes to the southern areas, which is the direction in which the city is expanding, that is where setting up of new outlets is easier. “From Central station to say, Vandalur, the culture is different from the north of the city. Plus, the younger crowd prefers living there, which makes for more success for the brand,” Mr. Sundaram says.

Dr. S. Sumathi, head of the department of Anthropology in the University of Madras, concurs. “The infrastructure in the north of the city is quite bad, the approach roads are not good, the lanes are narrow,” she says. “And, when it comes to real estate developers, if they’d see lorries delivering water, they’d think, this place has a water problem, and would be reluctant to establish anything here.”

This negative perception is just prejudice, says Bernard D’ Sami, professor of History at Loyola College. “One can’t get away from the fact that the face of these suburbs is changing. A gated community is coming up at Korukkupet, other constructers have started working in Perambur.”

History, he says, has coloured minds and prejudices. “Even 25 years ago, foundry workers and workers in industries such as Ashok Leyland were paying income tax – they were earning up to that level.” And as for the popular idea that once they start prospering, people start moving and settling in the southern suburbs, Dr. D’ Sami debunks the notion. “They move for the education of their children, there is dearth of good colleges in the north.”


In north Chennai, Perambur goes placesSeptember 2, 2013

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