How will the slowdown affect the restaurants
Consumers will eat out less due to slowdown
Consumers will eat out less due to slowdown
The slowdown may affect the restaurant the most, as middle-class consumers, who spend the most on eating out, are decreasing. They may also cut down on eating out.
As per Livemint, there are four types of people who eat out. 36% are family bonding seekers, who go out 2–3 times a month, and spend about INR 5500 per month, mostly on North Indian and Chinese food. 24% are discerning urban eaters, who go out 4–5 times a month, and spend about INR 8700 per month, mostly on casual dining. 25% are fun seekers, who go out 5–6 times a month, and spend about INR 4500, mostly on American food. 15% are socializers, who go out 2–3 times a month, and spend INR 6500 per month, mostly on quick-service restaurants.
Rahul Jacob wrote that the Indian middle class (with the per capita income of INR 700 to INR 1400 per day are just 3% of the population) is shrinking: Lately, consumers have been cutting back on many things, from biscuits and soap to jewelry and cars. Pronab Sen, India’s former chief statistician, argues, “Over time, if there is a stagnation in upward movement (in income distribution)… you’re stuck.
Without an increase in wages, consumers will not be eating out. Fundamental reforms will not just help the economy to come out of the slowdown, but also help restaurants.