Weak Rupee Dampens Spirits of Fine Dining: ASSOCHAM
Hyderabad, Aug 7 (INN): Five star hotels and fine dining restaurants have registered a significant decline in footfalls to extent of 20 per cent 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 per cent than last year in the major metropolitan cities like Delhi-NCR, Mumbai, Chennai, Hyderabad, Ahmedabad 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 per cent per cent, adds the ASSOCHAM Assessment. It further reveals that some restaurant imports 85 per cent 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 per cent 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 per cent 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 per cent and 12 per cent in the three months, the bars, nightclubs and family-dining chains have also seen a similar bump.