The industry encountered short-term challenges, including high food inflation and a decline in dining out, which negatively impacted the sector in the first quarter
New Delhi: The restaurant industry is expected to turn around on the back of India’s overall strong fundamentals after facing temporary headwinds such as high food inflation and people dining out less that hurt the sector in the first quarter, according to Speciality Restaurants Ltd. chairman and managing director Anjanmoy Chatterjee.
The company, which has a slew of brands such as Mainland China, Asia Kitchen by Mainland China, Episode One, Haka, and Sweet Bengal, among others and shut 29 outlets during the pandemic, is now focussing on profitable growth while expanding its footprint.
“It should be clear that India not eating out or inflation not settling down is something which I don’t believe in. India is better than many more countries…,” Chatterjee told PTI.
He was responding to a query on how long factors such as high food inflation and people dining out less after the diminishing of ‘revenge eating’ post pandemic that affected the restaurant industry, will continue to impact the sector.
“It is a short-term phenomenon. It will settle down once the food inflation comes down,” he said, however, adding it would also depend on employment generation and the rise of disposable incomes.
“I’m very sure this will turn around,” he asserted.
As per government data, food inflation in July was 3.45 per cent, down from 10.87 per cent in June, mainly due to month-on-month decline in prices of vegetables, cereals, pulses and onion.
Chatterjee, however, said in the first quarter of this fiscal for players in the sector from QSR and fine dining to casual dining, things have not been very good as ‘revenge eating’ had diminished, while food inflation coupled with competition from cheaper unorganised players also played a part.
Asked about the company’s expansion plans, he said,”We are looking at controlled, profitable growth, intentionally done with a geographical expansion of not cannibalising the existing stores.”
Flagship brand Mainland China, its variant Asia Kitchen by Mainland China will be the main growth drivers along with the new one, Episode One, he added.
Last fiscal, he said the company opened four restaurants and similarly another three to four are expected subject to availability of space in time.
In the first quarter ended June 30, Speciality Restaurants had reported total income of Rs 111.52 crore and PAT of Rs 7.64 crore.
