All’s not well
New Delhi, Sept. 1: Fine dining restaurants have witnessed a decline in footfall with the fall in the value of the rupee.
A study commissioned by industry chamber Assocham says fine dining restaurants have been reporting up to a 20 per cent fall in customers over the last three months. Menus at restaurants specialising in global fares have become costlier with a rise in the prices of raw materials such as New Zealand meat, Thai spices, and Southeast Asian fishes.
However, niche businesses offering local cuisine are bucking the trend.
“The declining rupee has impacted the business by increasing the cost of imported food, liquor and equipment used in restaurants,” said Samir Kuckreja, president of the National Restaurant Association of India.
According to hoteliers, expenditure on fine dining is a discretionary activity, which has been impacted not only by rising costs of imports but also the sluggish economy and overall high inflation.
“These factors lower the propensity to spend on dining out and entertainment and thus create pressure on the industry,” Kuckreja said.
Up to 60 per cent of the ingredients used in specialty restaurants are imported and do not have local substitutes. According to industry experts, imported ingredients account for 45-60 per cent of the food cost of specialty restaurants depending on its cuisine.
“Any ingredient that is imported has become expensive by as much as 32 per cent. Restaurants are cutting down on ingredients such as truffle oil, porcini mushrooms and other niche ingredients. At a recent meeting, a restaurant chain chef said they might cut down the menu and reduce the number of items. I do not see the scenario changing this festive season and we would have to cut down on exports,” said Uday Chugh, managing director, Virddhi Specialty Foods, which specialises in importing and selling food and cooking ingredients.
He said this year the firm had not received any pre-orders for corporate gifts.
However, niche restaurants, specialising in Indian cuisine are bucking the trend. “As we use all localised ingredients, the rupee depreciation has not affected us. Our footfalls have not gone down as we are a niche Indian cuisine chain ... our clientele does not feel the pinch of the rupee crisis,” said Monish Gujral, chairman, Moti Mahal Delux Management Services Private Limited, which runs a chain specialising in Punjabi-North Indian cuisine.