Have you dined at your favourite restaurant recently after a long break and have felt the price changes of your favourite chicken balls, double-patty burger or your favourite drink to sip? Yes, restaurants across India has gone through a certain price changes in the menu, all thanks to the continuous fuel price hikes and un-availability of certain ingredients locally.
It was almost 2-3 months back when I visited one of my favourite QSR chain to found that my favourite burger and other loved items on the menu have gone through a price revision of almost 20-30 rupees, making it even tougher for customers to visit these outlet more often. And, that’s where it clicked in mind to speak to the restaurant owners to know the inside stories.
“Surely the rise in oil prices is another blow to the already struggling global supply chain, which has increased the prices of raw materials in restaurants, ultimately impacting the customer and their ability to spend. Individuals are just recovering from covid and getting back to steady jobs and salaries with inflation is a challenge as they would not be able to dine out at the same frequency as before, which slows down the recovery for restaurants,” shared Amrut Mehta of Little Italy Group of Restaurants has faced the supply chain issues of certain products and raw materials post opening of the lockdown and it is still continuing.
Mehta is also of the opinion that products that are especially imported are the most impacted as availability was already a challenge coupled with increasing prices. “It's a big hit to restaurants. Even local produce with the oil prices is seeing a significant hike,” he pointed as he has also hiked the prices of items served at his restaurants.
Beating the heat
There’s no denying that the only way for restaurants to stay in business is to hike rates to subset the impact of inflation, but it's not an ideal choice as, ultimately, the customers suffer and the business as a whole would start to suffer too. This gives more opportunity to local produce and restaurants are trying to use more local products to support the local communities.
“By doing our mass production in the central kitchen, we are trying to reduce manpower costs and overheads. Also, higher the buying power, higher the negotiation power. In such scenarios restaurants can work at contractual rates with vendors through the year,” added Gaurav Kanwar, Founder at Harajuku Tokyo Café in Gurgaon.
Kanwar is also using bare minimum fuel/electricity consumption at the outlets by making everything in big batches at the central facility and using outlet kitchens as only assembly/fly kitchens.
Commenting on the same, Mehta pointed, “The delivery business is still fairly stable and a majority of the customers order from a need-based perspective. They still need to take care of their basic eating needs, but they are becoming more price conscious and looking for offers to incentivise their purchase.