The landmark move by the Modi Government to demonetize high-value currency notes to stamp out black money is expected to mark a short-time dent in the income of the restaurateurs.
Many restaurant owners have accepted that they are already witnessing a steep dip in the number of consumers since the Government has banned Rs 500 and Rs 1,000 notes as most of the transactions are based on cash. However, they are confident that the future will be bright after a brief lull.
“The business has definitely slowed down. Not everyone is a card holder, because of which people are unwilling to visit restaurants. However, we truly believe it is only a fleeting phase and we will soon be back to our usual sales,” said, Owner, Imly, Varun Puri.
Echoing the similar thoughts, Owner, Tourist, Dinesh Arora said, “The overall business has been affected but this affect is just for a couple of weeks.”
Understanding the pain of common man, the F&B industry is not blaming their consumers for not eating out at the restaurants as they believe that customers do have credit cards but they are upset as they cannot use their cash and in several cases they are just moving on without buying.
“We have seen more than 50 per cent dip in the overall business, till now. I believe it’s not because of the limited purchasing power but more due to the confusion caused by the sudden announcement,” revealed MD, Kylin, Saurabh Khanijo.
With comparatively less cash in hand, consumers are preferring saving it for emergency rather than spending on leisure activities.
According to Onwer, Big Fish Ventures, Umang Tewari, “The immediate effect of discarding Rs 500 and Rs 1,000 note is detrimental for the restaurant industry as ticket size is high as about 30 per cent of business happens on cash.”
A Deep Dent
Many eatery owners are of the same opinion that the consumer spends at the restaurants have dropped tremendously. And the coming few weeks also seems tough for restaurant operations and it is expected that the industry will see a further slump.
Owner, Nukkadwala, Kanishk Tuteja said, “We are expecting 30 per cent less business in the coming few weeks.”
Putting the Best Foot Forward
As F&B sector counts on weekends for good sales, so many restaurants are offering exciting deals to attract the consumers.
“I have introduced a very exciting offer of cashless party over the weekend. On the acceptance of ID proof and mobile number for our records, we are giving credit of Rs 6,000 to customer to enjoy food and drinks at any of our outlet. This money they can give to us once they have the money,” revealed Owner, Lord Of The Drinks, Priyank Sukhija.
Whereas, Owner, The Roost – Urban Bistro, Pranay Kumar said, “We are planning to encourage credit card usage even for large groups as we are incentivising them not only with discounts but also adding loyalty points on ‘The Roost App’ so that they can avail of benefits in the future.”
Similarly, Imly is offering special discount to those who are paying by card. Whereas a few others are offering extended happy hours and special cocktail packages.
“We are for sure introducing some weekend offers like extended happy hours, molecular signature cocktails package,” said Owner, Molecule, Manish Sharma.
“We have extended happy hours throughout the day. Also have introduced discounts on our signature cocktails,” said Tewari.
Payment Banks – Last Ray Of Hope?
Not just great offers, the restaurateurs are also looking for other ways to maximise their profit. And one such resort is mobile payment banks.
Many big players like The Beer Cafe, Big Fish Ventures, Imly have already tied-up with the mobile payment companies to ease the payment process whereas others are looking forward to sign the agreement as soon as possible.
“We already have a tie-up with Freecharge and Quikwallet and the integration with Paytm and Mobikwik is going on. These payment gateways have to be integrated into our ERP and is valid across all the outlets in our network. We see these companies providing offers to onboard more customers on their platform , so there will be a swing towards their usage which augments well towards our company values of a cash-less business,” said Founder and CEO, The Beer Cafe, Rahul Singh.
He further added, “Though we as merchants pay bank commission on plastic cards and mobile wallets, it is an ideal instrument for ease of accounting and efficiency. For the currency collection, we have a bank tie-up which picks from all our outlets every day and this also comes at a monthly service cost. And there is always the risk of safe keeping and wastage of time in loose change and counting.”
Realising the advantages of the mobile payment banks, a few other stalwarts like Tourist, The Roost – Urban Bistro and Unplugged Courtyard also believe that this is the need of the hour and they are trying to reach out mobile payment companies for the same.
The Future Seems Bright
Even after putting so much efforts, industry is hopeful that the market will soon get back its lost sheen. “Our Government is taking every possible step to normalize the currency flow but it will take some time to smooth out. As people have started switching to card transactions, we are still hoping the drop in sales will be around 30 per cent,” said Khanijo.
Agrees, Singh, “Over the past few days, we have seen a drop of 7 per cent in business. This will be back to normal real soon as our demographics is the young urban who have always preferred plastic over currency and the little dip has come in due to the abolition of a particular tender series which will be reinstated in few days. “
Founder, L’Opera, Kazem Samandari also smells positivity after a brief lull in the market as he said, “We are experiencing up to 40 per cent less sales, however, but we hope that once the customers get used to the new currency notes and can dispense more money from ATM machines, our business will go back to normal.”