- December 27, 2016 / 2 min readWhile increased payment through the electronic mode has cushioned bakers in cities, their counterparts in the smaller markets have had to resort to bringing out smaller packets to boost sales.
Cake makers are feeling the pinch of demonetisation ahead of Christmas and New Year, their best season for sales.
While sale of cakes in most cities is down by about 10 percent from a year ago, it has slumped by 20 percent or more in semi urban and rural markets.
While increased payment through the electronic mode has cushioned bakers in cities, their counterparts in the smaller markets have had to resort to bringing out smaller packets to boost sales.
TR Raghulal, Managing Director, Elite Group, said, "As a result of reduced cash flow, the home budget has been impacted and sales are down by 10 percent. The size of cakes is shrinking. The earlier 1 kg has become 800 gm while 750 gm has become 600 gm."
Raghulal said the industry is trying to rev up interest through innovation.
He further added, "People are looking for variety. We have introduced novel varieties like pudding cake, jackfruit cake, etc., to stir up interest."
For instance, Mumbai based cake brand Monginis Food has come out with designer cakes.
Ayyappan K Swamy, Head of Marketing and Franchisee Operations, Monginis, said, "In cities the demonetisation impact was severe in the first two weeks but it has eased somewhat now. We are tying up with electronic payment companies and are educating dealers to encourage this mode of payment."
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