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Delhi: With liquor ban, It’s a hard summer for restaurants


NEW DELHI: Hard times have been visited upon restaurants. The demonetisation drive launched in November last year, followed by the Supreme Court liquor embargo and controversies over service charge and portion control have piled up trouble for the dining industry.

“Our revenues have been hit since the liquor ban was brought into force,“ said Mukta Kapoor, corporate head, marketing, for Delhi’s Indian Accent.

The fine dining restaurant is the country’s only entry on the World’s 50 Best list for 2017 but cannot serve alcohol after March 31 ruling banning sale of alcohol within 500 metres of national and state highways.

Not just the celebrated, all formats are reporting 10-15% drop in business growth this summer from last year. Industry associations are pegging the overall slide in business at about 10%.

“For our Swagath chain of restaurants, sales have been down by 15%,“ said Roshan Banan, MD, Ocean Pearl Hotels, which also runs the Sagar Ratna chain. “We saw a major drop around demonetisation of 30% and since then, recovery has been very sluggish. When there was confusion around the service charge issue, we saw people were not comfortable paying, so we removed the service charge. There was no clarity and we didn’t want to annoy our customers.“

For US casual dining chain TGI Fridays, business has been down 8-10% this summer. “Depending on the legal resolution of the service charge issue and Supreme Court liquor ban, I remain optimistic but yet prepare my budgets for the worst case scenario,“ said Rohan Jetley, CEO, TGI Fridays India.

Kamlesh Barot, director, Vie Hospitality, pegged the slump at around 30% for some. “It has been bad because of factors such as demonetisation, the liquor ban and also anxiety around impending GST (Goods and Services Tax). The industry is affected by a sentiment that it has been a soft target lately.“

Degustibus Hospitality witnessed a decline of 7% for its Indigo brand. “Organically, there has been a definite decline compared to last year, when we talk of restaurant-to-restaurant growth. The biggest factor has been the liquor licence ban, which lasted for over a month and changed market sentiment. It’s still continuing in some markets. Issues like portion control and service charge are adding to the confusion. So there is sluggishness right now,“ said Anurag Katriar, executive director, Degustibus Hospitality.

Degustibus’ two Indigo outlets -in Gurgaon and Pune -were hit hard. “Once you have shut down the liquor business, reviving it takes three to four months,“ said Katriar.

Source:  Economic Times

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