Weak rupee dampens spirits of fine dining by 20pc in Chennai

Chennai:

Five star hotels and fine dining restaurants in Chennai have registered a significant decline in footfalls to extent of 20 per cent in the last three months due to falling rupees, reveals a study by Associated Chamber of Commerce and Industry of India (ASSOCHAM).

Releasing the ASSOCHAM paper on “Weak rupee dampens sprits of fine dining restaurants” D S Rawat, Secretary General of 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 20pc than last year in the major metropolitan cities like Chennai, Hyderabad, Ahemdabad, Delhi-NCR and Mumbai. 

The study states that due to rupee depreciating against major foreign currencies, prices of imported products have shot up by as much as 30-35pc. It further reveals that some restaurant imports 85pc 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 current size of the Indian food industry stands at Rs 2,50,000 crore per annum and is expected to grow at 12 per cent 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.  

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 paper also highlighted that imported spirit prices increased between 7pc and 12pc in the three months, the bars, nightclubs and family-dining chains have also seen a similar bump.