Estimate the number of restaurants in Mumbai.

Step-1 : Clarifying the scope of Question:

Mumbai is densely populated city with restaurants at all levels.

• There are star restaurants.
• There are many small non star restaurants.
• Are we focusing on any specific category?

-          Say we need to consider in general

There are many road side eateries as well serving a considerable chunk of population. Are we considering them?

       - Assuming it is considerable, Say you can at least consider in business hubs.

We are only considering restaurants and not big Hotels with restaurants within the hotel. Is my understanding correct?

-       You can consider based on your choice.

Based on the clarifying questions above, I will approach this question in a structured manner where I will make a uber level equation, then will dive deep into each part of the equation to finally reach the calculation.

Step -2 : Main Equation

To be able to calculate number of restaurants, we will have to calculate the number of people who dine out or place an order and average number of people that a restaurant serves per day.

#Number of Restaurants = #Number of people dine out or order in / #Average number of people each restaurant serves.

Step – 3 : Let us dive in further and break down each component.

 #Number of people dine out or order in

Mumbai population is ~20 million out of ~1300 million of India population

Assuming we have following kind of people who dine out/order in.

1: Daily – Bachelors/ Office goers – who would like to order on the go or dine out daily – say 30% of the population are bachelors and office goers out of which 60% do order in or dine out.

= 20 million * 30% * 60% = 3.6 million

2: Mumbai being business hub, considerable number of office goers go for a party/ lunch together to near by restaurants – these kind of people can account for 25% who belong to mid-high scale offices out of which say 50% go out at least once a week

= 20 million * 25% * 50% / 7 days= ~400000 per day

3: Families who dine out once a month – on average 4 people per family, say 30% go out per month.

20 million/4 = 5 million families.

5 million families * 30% /30 days = 50000 famillies = 200000 per month.

So assuming all these categories are dining out on a single day, total number of people dining out/ordering in = 3.6 million + 400000 +200000 = 4.2 million

Next category,  #Average number of people each restaurant serves- 

There are star categories of restaurants in Mumbai where on an average seating capacity is 250 – 500. There could be small eateries with 20 people seating capacity. A person spends INR 40(road side) to 4500 (in a star hotel) in Mumbai. So on an average a person can spend 350 per person.

We can say, maximum of the crowd will go to 1-2 star and street side restaurants to be able to place order with 350 per person as a budget.

In Mumbai, a street side or 1-2 star hotel has to cater to at least 80-200 people to be able to reach the margin of cost and revenue. We will take the lower side to cover the upper side of the number of restaurants.

Step-4 – Calculations and Assumptions

Assuming most of the crowd is ordering/dining in a restaurant with 350 INR as a decent budget per person, and a mid-range restaurant to be able to serve at least 80 customers daily to meet the break even, following will be the calculation.

So total number of restaurants = 4.2 billion /80 = 52000

Step-5 checks and revisit edge cases

Edge case – We have ignored the 3-4-5 star restaurants. We also didn’t consider the big shopping malls which has many eateries, cinema complex having food vendors. If we add them up by 20%, it will come to

 52000 + 20% = ~66000.

We did not consider the daily wagers and common people who thrive on the road side street food. And that kind of restaurants in a densely populated business/realtor area is at least 4 times denser than the general area. Assuming Mumbai being a business hub, caters to these areas to 20% of entire Mumbai, adding the restaurant numbers 20% up, it will come down to 66000 + 13200 = ~79200

 So as a summary we can say there can be ~80000 restaurants in Mumbai.