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Retail inflation

Input costs up, restaurants in Kolkata forced to hike rates to sustain business

Even before the impact of the Russia-Ukraine war was felt, rising inflation had choked the profitability of the eateries

Debraj Mitra | Published 30.06.22, 05:58 AM
A dish at a city restaurant

A dish at a city restaurant

Sourced by The Telegraph

Many restaurants have increased their food prices over the past month to combat escalating production costs.

The increase, marginal in most eateries, did not translate to profitability but was an attempt to offset the shrinking margins, said owners.

The trend had started in late April, when the impact of Russia’s Ukraine invasion was felt, mainly reflected in soaring prices of edible oil. But even before that, rising inflation had choked the profitability of the eateries.

Some of the more established players had then refrained from escalating prices despite suffering a steep increase in the input costs.

But now, they have also been forced to increase food prices.

Speciality Restaurants, the brand that includes several fine-dining outlets including Mainland China, Oh! Calcutta and Riyasat, has had a “three to five per cent” rise in food prices.

“One by one, the price of almost every ingredient went up. The Ukraine crisis shot up the price of cooking oil. The price of rice has gone up by around 30 per cent. We had absorbed the additional costs for a long time. But after a while, our vendors threw up their hands, forcing us to revise our rates,” said Anjan Chatterjee, chief of Speciality Restaurants.

A plate of pan-fried chilli fish in Mainland China now costs Rs 645. Around a month ago it cost Rs 620.

Peter Cat and Mocambo in the Park Street area have seen “a marginal increase in food rates after a long time”, owner Nitin Kothari said.

“We tried to absorb the escalating costs for a long time. When it was impossible to sustain, we had to increase our prices,” said Kothari.

Bar-B-Q on Park Street has had a price rise of “around five per cent”, owner Rajiv Kothari said.

The steady footfall after the removal of night curbs has not been enough to see restaurants through. The sharp spike in the price of edible oil and the increasing transportation costs on account of rising fuel prices were continuously bleeding the coffers, said owners.

The price of meat has gone up by over 25 per cent over the past two years. Rice, groceries and vegetables, too, have become much dearer than they were.

Shiraz Golden Restaurant has had a price rise of “around eight per cent”.

Ishtiaque Ahmad, a partner of the chain, said: “A 19kg cylinder cost Rs 1,200 a couple of years ago. Now, it costs around Rs 2,400. The price of refined oil is now Rs 160 per litre. It was Rs 90 per litre before the Ukraine crisis. There is hardly any breathing space for us.”

A plate of mutton biryani at the chain’s outlet in Mullickbazar now costs around Rs 300, up from Rs 270 a month ago.

“While online food aggregators have increased the sale volume, they have also eaten into our margins substantially,” Ahmad said.

Shiladitya Chaudhury of Oudh 1590 and Chapter 2 said food had become costlier by “five to eight per cent”.

“A kilo of curry cut mutton now costs us Rs 635, dearer by more than 25 per cent over the past year-and-a-half. Similarly, a kilo of boneless chicken costs Rs 290 now, up from around Rs 240,” he said.

Sudesh Poddar, president of the Hotel and Restaurant Association of Eastern India, said: “We held back any price rise till we could. But there was no relief and we were forced to go for a price revision.”

Last updated on 30.06.22, 07:25 AM
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