The ban on service charge will not make your restaurant account lighter

Copyright © HT Digital Streams Limit all rights reserved. Companies Service Charge Returns as a menu price increase, Diners fear that double hit comfortable dining chains have started to reprint menus with revised rates. (IStockphoto) Summary restaurants raise their menu prices after the Delhi High Court impedes a 10% service cost. Customers fear that they can now flip twice, even if restaurants are the risk of turning patrons away when consumption delays the ban on service fee, it will not be cheaper – the leading restaurant chains want to raise prices to compensate the loss. Some customers believe the final costs could be even higher than before, including tips for the waiting staff. After the Delhi High Court has broken the restaurants that prevented the optional fee of 10%, many outlets and chains contain an equivalent rise in their menu prices. The increase may be higher in malls or premium areas, where rental agreements are linked to income. Usually, most eateries take about an annual hike of 5% to compensate rising input costs. ‘Ideally, restaurants would have raised prices by about 15-20% this year to account for both food inflation and the removal of the service levy. But it is not at the moment feasible non-customers will not pay that much more, especially if the demand has delayed, and the industry is already seeing a little slump, ‘says Sagar J. Daryani, president of the National Restaurant Association of India (NRAI) and co-foundation of the quick service chain! Momo. The association represents about five Lakh restaurants in the country. Accidental dining chains have already begun with the revised rates reprint. Read also | Small restaurants, cloud kitchens Heat the competition: Rakesh Ranjan, CEO, food delivery, Zomato “Yes, we have to raise our prices and are reprinting our menus. In our case, consumers will not pay more than they paid earlier,” says Zorawar Kalra, founder and managing director at massive restaurants, including the chains and Farzi Cafe, Masala Library, Upper Tai and Operates Chaines and Farzi Cafe, Masala Library, Bo-Tai and Operates Chaines and Farzi Cafe, Masala Libly Papaya. “But we absorb a lot of food inflation costs, so the total account will remain exactly the same.” However, he said, the price increase would vary based on the location due to income share agreements with certain landlords. “Since India does not have a strong flip -flop culture, we do not expect much in terms of tips.” In Mumbai, Chrome Asia Hospitality, which runs Gigi, Lyla, Eve, Kaia, Donna Deli and other outlets, is also the pricing of menu. “There is no tilt culture in India, so we will have to take a 10% price increase at our middle market marks,” said founder Pawan Shahri. “But at the premium stores, we will request guest permission to include a voluntary service charge, and if they are comfortable with it, we will add it.” Eating out at hotels is already more expensive. From April 1, restaurants in hotels that charged more than £ 7,500 per room per night last year will now have to charge 18% GST on food bills instead of 5%. Read it | The cattle restaurants have with SWIGGY, not only on a fast food delivery India’s total organized restaurant sector is 1.9% of the country’s GDP and, according to the industry’s estimates, contribute about 1.5% to the annual GST collections. Higher prices are at risk of rejecting consumers in the midst of constant uncertainty. According to Pranav Rungta, director of Mint Hospitality, there is already some tension on consumer spending, running Tamak and Nksha restaurants in Mumbai. ‘There is a reduction in spending per visit, but there is no reduction in the number of visits. People are still going out, but don’t spend as before. ‘ The total food services market is expected to grow from £ 5.69 trillion in 2024 to £ 7.76 trillion by 2028, expanding at a compound annual growth rate of 8.1%, according to a July 2024 report. What used to be an ‘optional’ service charge is now built into the cost of the food. If the service is bad, customers will not be able to complain or dispute it, and ensure that the 10% remain standardized, according to Gautam Lamba, 37, a restaurant -goer in Mumbai. On top of that, he said, servers will also expect an extra tip after the meal. Read also | Hotels penetrate GST -Parity with independent restaurants “There is a real possibility of turning double now,” said another regular dining room, Ankita Sharma of Delhi. “You pay more for the food, and then you show again, because there is no more service charge.” Some restaurants in the capital that Mint has visited over the past few weeks have not yet taken off the service charge of their final account. The service charge is usually added to the account with cafes, bars, bars, lounges and comfortable and fine-eating stores. In FY24, casual eateries had the largest share in the organized food segment, which accounted for 48.6%. Employees to take restaurants believe that the service change bar will affect employees. In most restaurants, staff earnings include both fixed salaries and variable payment, making a significant contribution from the service charge, according to Rungta of Mint Hospitality. Read it | Restaurants want to make a big contribution to the World Cup. “The removal of the service charge will hit their income directly. Restaurants need to review their finances, increase menu prices and still ensure that staff are paid fairly – otherwise it will be very difficult to retain it,” Rungta said. ‘But somehow the costs will still fall on the consumer. Earlier, it was paid transparently by the service charge, and Diners usually did not sign on top. Now restaurants will be forced to raise prices, and customers can eventually tilt. ‘ According to the NRAI, the restaurant sector directly employs 85.5 lakh people, and the number is estimated to increase by more than 20% by 2028. “The move (after the bar service complaint) was too sudden and took time to bring everything back in line,” says Rungta. “Those with revenue share contracts or rental distribution agreements with landlords based on the income of a restaurant will also have to negotiate again if they achieve prices.” And read | Accidental dining sector faces ‘Cloud -Learer’, inflation and other challenges for the increase in costs, and this is all corporate news and updates on live mint. Download the Mint News app to get daily market updates and live business news. More Topics #Hospitality Sector Mint Specials