Budget 2021: Opportunity in food business is a point to be questioned
February 4, 2021 8:58 AM
Union Budget 2021 India: The NRAI represents the interests of 6 lakh restaurants across India. As the pandemic surged the restaurant and hospitality industry experienced the first jolt of it.
During the pandemic while restaurants were shut a new trend came into being and that was the surge of ‘Deliveries & Take-Away’.
Indian Union Budget 2021-22: The restaurant industry, with an annual turnover of nearly Rs 4 lakh crore, provides direct employment to over 7.3 million people. The NRAI represents the interests of 6 lakh restaurants across India. As the pandemic surged the restaurant and hospitality industry experienced the first jolt of it.
During the pandemic while restaurants were shut a new trend came into being and that was the surge of ‘Deliveries & Take-Away’. Since, people were stuck at home, they started ordering from various restaurants as soon as the government permitted restaurants to operate via a delivery and take-away model. This made us relook at the business model by way of size, structure, venue and pricing. We realised that the three things that would form the base of getting back into the game were to survive, revive & thrive.
Over a period of time as the lockdown was ‘semi’ lifted with a negligible line of respite being offered to the restaurant industry we started to continue with dine-in services. Yet, there are a number of challenges that the industry is continuing to face. With the new trend of ‘work from home’ (WFH) the section of diners have now changed to ‘ordering out’ or ‘eating at home’ as hygiene became a prime concern.
n lieu of the new budget announcement made by the FM, there has been funds allotted towards infrastructure and manpower. With a boost in the economy’s growth there is a possibility that it may lead to more employment and generation of jobs which could result to a better spending power in the hands of individuals. While, the restaurant industry still faces the brunt of the GST restrictions with no input tax, from a business perspective is becoming a point of ‘survival of the fittest’. Furthermore, with restrictions of travel and tourism almost 60% of branded hotels in India are shut while the remaining 40% are operating with less than 10% of revenues. As per Crisil, restaurants were operating at 25%-30% of their monthly service levels in the first 45 days after the lockdown is lifted, and are on course for a 40%-50% drop in revenue this fiscal year.
As new practices take hold to minimise contact among customers and employees, organisations can start to reassess their processes and operating models, both to enable safe scale-up and to accelerate toward approaches that minimize contact. That will require looking critically at end-to-end processes to mitigate risks in improving operational effectiveness under changing conditions. Opportunity in the food business as of this moment is a point to be questioned. We will need to wait for the current pandemic to get over and the economy to settle in. As we are heading to the dream figure of the five million mark, hopefully the economy will start to show better figures helping us to get back to complete normalcy.