Updated on: Thursday, May 30, 2019, 11:22 AM IST

Demonetisation effect: Footfall at restaurants dips as pockets run dry


New Delhi : Several restaurants in the city are witnessing thin attendance as pockets run dry after the Centre’s decision to demonetise 500 and 1,000 rupee notes with small eateries and roadside dhabas that do not have electronic payment facility being the worst hit.

As people struggled to pay for basic necessities such as vegetables and milk and flocked to banks in large numbers to exchange now-defunct notes with new ones, eateries only hope that the lean phase will end soon.

While many restaurants accepted payment through debit and credit cards, small eateries and roadside dhabas that do not have electronic payment facility bore the brunt of the move.


Some restaurants and delivery services are even asking customers to ensure that they have Rs 100 notes or the new currency before serving them.

Zomato, the online restaurant search and food delivery service, has temporarily stopped the cash-on-delivery option for many restaurants and requested customers to pay online.          “We sell food at reasonable rate and we do not have the payment facility using cards. Earlier there used to be huge rush at our eatery. Now people can’t pay for a ‘daal makhni’ and ‘shahi paneer’ by cheque, so our customers are being forced to go back if they do not have new currency notes,” said Rajveer Singh who runs an eatery at Connaught Place.

Most retail stores and restaurants have placed a notice at their entrances, declaring their compliance with the government’s order and requesting customers to tender notes of Rs 100 denomination or use e-wallets, credit and debit cards for any purchase.


Deepankar Arora, chef and partner, TAWAK, an Indian and Pan-Asian restaurant in NCR, said, “With not enough notes in circulation yet, all our customers are either using cards or alternative payment gateways such as Mobikwik. We have seen an upswing in online and app orders as people are choosing to use mobile wallets and cards instead of cash.”

“However, we have faced some issues in our day-to-day purchases of ingredients and raw materials from with vendors. But they have been understanding of the situation and extended us credit,” he added.

Chaos prevailed in the city following Prime Minister Narendra Modi’s announcement last week withdrawing 500 and 1,000 rupee notes to tackle problems of corruption, black money, counterfeit notes and terror financing.


Riyaaz Amlani, president of the National Restaurant Association of India and head of the Impressario Group that runs cafes across the country, said, “The first day people were caught unaware and there was some liquidity crunch because people didn’t have cash. In our restaurants, we see 50 per cent of our business coming through cash. When there are large groups, they prefer to pool in money and pay through cash.”

“We had this problem that on the same table, we had to take five credit cards. There was a liquidity crunch in the first two days and on Friday, business improves,” he said.

“I believe valet attendants, bathroom attendants are facing problems because they are not getting tips. Waiters, who used to get tips even after service charges and service taxes, are also not getting tips,” he said.

Rahul Singh, founder & CEO of the Beer Café chain, said, “On Wednesday and Thursday, we saw a seven per cent dip in our sales across India because of the cash crunch. We deal in 70 per cent plastic money and 30 per cent in cash. It’s a short-term issue. The kind of demographics we cater to, we mostly deal in plastic money.”

Speaking about the NCR region, he said, “In Gurgaon, I haven’t seen a dip in business and it’s business as usual. We have seen dip in business in west Delhi since I think that people there deal in cash more.”

They hoped that the situation will return to normal soon.–PTI

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Published on: Monday, November 14, 2016, 08:50 AM IST