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Category 2016-11-10

Currency demonetisation hits restaurant industry

The restaurants that used to outperform with people waiting outside to look out for their numbers have been badly affected by this short-term move.

By Deputy Features Editor
Currency demonetisation hits restaurant industry

In last two years eating out scenario has been tremendously growing in the country with people eating as much as 5 times a week. But, with Prime Minister Narendra Modi’s strong decision to ban Rs 500 and 1000 notes has strongly affected the eating out scenario in last two days.

“PM Modi's move to ban Rs 500 and Rs 1,000 denominations will certainly have impact on restaurant / hospitality Industry. Now there will be huge fall in the openings of the new cafes / restaurants,” shares Rohit Malhotra, Country Head, Barcelos India.

Not only this, the restaurants that used to outperform with people waiting outside to look out for their numbers have been badly affected by this short-term move. “Consumer spends at restaurants dropped as much as 40-45 per cent on Wednesday. But for long term this move is very positive and will benefit the growth of the sector,” says Riyaaz Amlani, President NRAI and CEO Impresario Hospitality and Entertainment.

Cashing on this ground, several restaurants started giving discounts while others started offering cash backs with their wallet partners.

"It is a very big step for the economy but has taken everyone off guard. The move is likely to cause a huge amount of uncertainty and will disrupt transactions, especially for smaller hotels, restaurants like us. Today it's a little bitter but this is for our country bright future country,” believes Dinesh Arora, Owner of Tourist Janpath.

Adding to the same line, Shree Bharambe, Co-founder & CEO, Fingerlix shares, “We at Fingerlix welcome this move by the Government. For start-ups like Fingerlix that depend on the retail channel for reaching the consumers there will be an immediate-term impact as the consumers re-adjust their currency holdings. However, the back-end operations are already non-cash and hence will not be impacted in any way. We believe that from a longer term perspective, this move is a significant step forward for the nation."

Although fall in property prices, drop in competition and reduce in unnecessary demand in labour will bring good time for restaurant industry ahead. This decision will hurt black money hoarders the most but it may also cause inconvenience to the common man — even if only for a few days

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