Five star hotels and fine dining restaurants have registered a
significant decline in footfalls to extent of 20% in the last three
months due to falling rupees, reveals the associated chamber of commerce
and industry of India (ASSOCHAM) recent findings.
Releasing the ASSOCHAM paper on “Weak rupee dampens sprits of fine
dining restaurants” D. S. Rawat, Secretary General ASSOCHAM said due to
fall in rupee, the five star hotels and fine dining restaurants are
revising their menu card rates as the weak rupee pushes up prices of
imported food ingredients and spirits.
With a negative market sentiments of an economic slowdown and weak
rupee, the fine dine market segment may lose its sheen. The paper
further highlights, fine dine market registered a decline of over 20%
than last year in the major metropolitan cities like Delhi-NCR, Mumbai,
Chennai, Hyderabad, Ahemdabad etc.
The paper further points out that due to rupee depreciating against
major foreign currencies, prices of imported products have shot up by as
much as 30-35%, adds the ASSOCHAM Assessment. It further reveals that
some restaurant imports 85% of its ingredients from Japan,
French-Italian, Thailand restaurant for its signature dishes.
Rawat further said that premium hotels and restaurants use imported
olives, olive oils, legumes, meats like salmon, tuna steak, pork
pepperoni and turkey ham, Italian and French cheeses, fine wines and
spirits to tickle the taste buds of Indians. Nearly 45-60 per cent of
the food cost of specialty restaurants depending on their cuisine, the
cost of imported food products.
The paper further said that there has been a growing number of Indians
travelling abroad. They are well versed with fine dining and want the
same treatment when they come back to India. The international fine
dining restaurants in five-star hotels and growth in the mall culture
boosting demand for fine dining restaurants. The falling rupee is
definitely resulting in a slowdown in fine dining to the extent of 20%
due to weakening rupees, adds the ASSOCHAM paper.
The rupee devaluation has majorly impacted the imports from meats and
seafood to cheese and legumes. Nearly 60% of the food produces at
specialty restaurants are imported and does not have local substitutes
here in India as a result they are bound to revise the prices of their
menus, adds the paper.
The current size of the Indian food industry stands at Rs 2,50,000 crore
per annum and is expected to grow at 12 percent to touch a staggering
Rs 4,25,000 crore by 2018.
In terms of market segments, the Quick Service Restaurants and casual
dine-in formats account for nearly three-fourths of the total chain and
cafes make up 12 per cent, with fine dining outlets, pubs, bars, clubs
and lounges comprising the rest, adds the ASSOCHAM paper.
According to a report, the size of the gourmet food market in India is
Rs 7,500 crore, growing at a CAGR of 20 per cent. The market is expected
to cross Rs 15,000 crore by 2015. The Indian gourmet food market
includes fine dining restaurants, café market as well as food retail.
The availability of imported ingredients is another factor for growing
demand for fine dining restaurants. Ingredients such as truffles,
artichokes, asparagus, Australian lamb and Norwegian salmon have found
their way into the Indian food and beverage space.
Rawat also said, “these restaurants are tapping the younger generation’s
hunger for the exquisite. Specialty restaurant owners as well as
five-star hotels are increasingly catering to those in their late
20s-30s as they are more experimental and have the money to spend.
Majority of restaurant owners said that a large proportion of consumers
spending money in international fine dining restaurants.
The paper also highlighted that imported spirit prices increased between
7% and 12% in the three months, the bars, nightclubs and family-dining
chains have also seen a similar bump.
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