Booming fuel, cooking oil and grocery prices have caught food business in a cleft stick. “We are absorbing the loss. If we increase the prices customers might disappear,” says Pyare Yadav, who runs a food kiosk inside the remodelled Moazzam Jahi Market. Commercial Liquefied Petroleum Gas prices have been increased by all the State-run oil manufacturing companies by ₹ 266 for 19 kg cylinder with effect from November 1.
A year back the same 19 kg LPG cylinder used to cost ₹ 1,100 and one month back ₹ 1,700 and now it is ₹ 2,000. This runaway price rise has reduced the profit margins to slivers, turning food business into a dicey preposition. Cooking oil, groceries and packing material prices have also seen a surge due to increase in transport costs.
“I can no longer absorb the losses nor cut corners. We are increasing the price by ₹ 5 per item from November 5,” says Upendra of Ambika Tiffins in Hyderguda. So, a plate of idly that used to cost ₹35 will now cost ₹40. He lists the surge in prices ranging from cooking oil price spiking from ₹1,400 to ₹ 2,400 per 15 kg tin of sunflower oil in the span of one year. “Even the packing containers price has gone up from ₹ 1,400 to ₹ 3,800,” he informs.
The price spike coming on top of months-long COVID-19 lockdown and downturn in business due to social-distancing norms have harshly impacted big restaurant chains. One well-known American restaurant franchisee used to serve Mexican rice with tacos. Now, diners get only tacos, no Mexican rice. Another restaurant specialising in Palegar cuisine used to offer groundnut chutney with its ragi mudde. Now diners have to order it separately. A plate of mirchi bajji used to have four-batter fried stuffed chillies. Now, only three are being offered for the same price. Portion sizes have shrunk in many restaurants. The mounds of rice burying meat in some restaurants have become smaller. Omelettes have become extra runny in a well-known cafe in Banjara Hills.
“It’s been a rough ride for all the restaurants considering the steady rise in most of the raw materials including gas and cooking oil and with no respite from either the Central or State governments it is becoming more challenging to survive in this business. All restaurants in my opinion will be forced to sooner or later increase menu prices to stay afloat and there’s no other option,” says Uttam Reddy of Rayalaseema Ruchulu, an award-winning restaurant chain in the city.