Archive · 18 Sep 2025
Restaurants in Tier-II Cities See Rapid Growth
Restaurants are becoming popular in smaller Indian cities!
Places like Prayagraj and Varanasi are seeing more restaurants open.
Young people like Gen Z now eat out as part of their regular lifestyle.
It's cheaper to open restaurants there compared to big cities, with lower rent.
Also, tourism is helping boost the industry.
Many restaurant owners plan to open more restaurants in these Tier-II cities, as this is where growth is predicted.
Tier-II cities are experiencing rapid growth in the restaurant sector.
Dining out is becoming a lifestyle choice, particularly for Gen Z.
Lower costs make Tier-II cities an attractive alternative to metros.
Pilgrimage tourism is a key driver of growth.
Over 90% of respondents plan to expand within Tier-II or Tier-III markets.
- Who
- Restaurant operators, consumers, and investors
- What
- Growth of restaurants in Tier-II cities in India
- When
- Report published on September 18, 2025
- Where
- Tier-II cities in India such as Prayagraj, Varanasi, Puri, Shirdi
- Why
- Rising consumer spending, favorable cost structures, and better infrastructure
Report findings
Strategic Recommendations
Market Entry
Report findings
Winning in these markets requires careful format choices, operational discipline, and a long-term view
Strategic Recommendations
Calibrated growth with local intelligence is recommended for success
- Key Growth Driver
- Pilgrimage Tourism
- Average Lease Cost (Tier-II)
- ₹200-250 per sq ft
- Average Lease Cost (Metro)
- ₹1,800-2,200 per sq ft
- Consumer Receptiveness to Foreign Recipes
- 72%
- Consumers following F&B brands online
- 33%
