Kolkata Mall Restaurants Brace for Major Losses Amid Extended Liquor Prohibition
The Election Commission's imposition of a liquor ban for nine and a half days over the next fortnight is set to severely impact restaurants and pubs located within shopping malls across Kolkata. These establishments, which operate under high rental agreements, rely significantly on liquor sales to cover their substantial overhead costs.
High Rents and Revenue Dependence Exacerbate Financial Strain
Owners of prominent mall-based restaurants have highlighted that for the month of April, many are likely to plunge into financial losses. This is primarily due to the elevated rents they pay compared to their counterparts on high streets. In malls, restaurants typically generate between 12% and 14% of the overall revenue, but operators now fear a drastic 50% reduction in April's earnings as the liquor ban spans nearly one-third of the month.
On average, liquor contributes to 30% to 35% of the total bill value at these restaurants. A mall operator emphasized, "The direct impact will be on restaurants, where sales will get halved. Parties and celebrations lined up on weekdays will be impacted, too." Another mall manager added that the anticipated dip in footfall could also negatively affect retail sales in the malls, noting, "Usually, the time around Akshay Tritiya is good for business. Such a prolonged liquor ban at this juncture is unfortunate for business."
Industry Leaders Voice Concerns Over Specific Brands
Anjan Chatterjee, Chairman of Speciality Restaurants, which operates 19 outlets including Mainland China, Oh! Calcutta, and Cafe Mezzuna across six malls, expressed deep concern. He stated that the prohibition would have a substantial impact on their operations. Chatterjee pointed out that certain brands under his umbrella, such as Hoppipola, Cafe Mezzuna, Siciliana by Mezzuna, and Asia Kitchen, are more reliant on liquor, with it constituting up to 40% of their sales.
"In these brands, liquor constitutes 40% of sales. We will have to book losses for the month. Most of the properties in malls will incur losses in April," Chatterjee said. He further mentioned that, similar to the pandemic situation, he does not plan to request rent discounts from malls but will instead absorb the losses for the month.
Immediate Effects and Broader Business Implications
Rishi Bajoria, who manages four outlets of Chili's Grill and Bar and one Royal China in Kolkata, reported that footfall and sales have already dropped by over 50% since the ban commenced on Monday. "Those who want to have a drink with their food will stop visiting restaurants and instead have it at home... we expect a 30% slide in April's turnover," Bajoria explained.
Additionally, a spokesperson for a group operating restaurants like Skai, The Irish House, and Bombay Brasserie in Quest mall revealed that in some of their properties, liquor sales account for 50% to 55% of revenue. With five restaurants in malls, the group anticipates making losses in April due to the ban.
The extended liquor prohibition, enforced during the election period, underscores the fragile balance mall-based restaurants must maintain between high operational costs and revenue streams, highlighting broader challenges in the hospitality sector during regulatory restrictions.
