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Citing soaring prices of vegetables – including staples such as onions and tomatoes – several restaurants fear they may have to resort to a price hike. Since discounts are certainly going to be off the table, either way, customers would have to shell out more.
While such steep prices are typically seasonal, this time they’re beyond “digestible levels”, Anjan Chatterjee, founder of Speciality Restaurants, which owns brands like Oh! Calcutta and Mainland China, told TOI. “It has been pinching us across. Our bottom lines are shrinking,” Chatterjee said, suggesting that a price review is underway. “Price increases are being absorbed as of now but we do not know what tomorrow holds,” he added.
Quick service restaurant chain Wow! Momo’s co-founder and CEO Sagar Daryani said that if prices of vegetables do not come down in 15-20 days, the brand may have to increase its menu prices in Aug-Sept. “We have not taken price hikes in the past one year. My entire momo sauce is tomatoes and chilli but I cannot charge my customers extra money for it,” said Daryani. The company has stepped up automation to manage its costs and save on labour expenses.
Smaller eateries are having an even harder time. Mumbai-based burger and pizza joint Bites N Grill has reduced the number of tomato slices it uses in its burgers and also discontinued the Caesar and Greek salads from its menu due of high lettuce prices, said founder George Kuriakose. QSR firm Boba Bhai which makes burgers has started rolling back discounts for some of its products, said founder Dhruv Kohli. For small chains that do not have the benefit of playing at a wider scale, raising menu prices comes with the risk of erosion of the customer base, nudging them to make other adjustments.
Large restaurants usually have annual contracts with their vendors for procuring supplies at a certain rate but the price fluctuations have pushed some of them to seek higher rates. To help some of its smaller vendors in Delhi, Massive Restaurants, which own brands like Farzi Cafe and Masala Library, has allowed a mild increase in rates (at which they procure supplies from vendors) for a 45-day period. “We have annual contracts but sometimes in spirit of partnership, we have to make some leeway to help our vendors stay afloat,” said founder and MD Zorawar Kalra.
The supply of good quality vegetables has also become a challenge with climate change, impacting menu planning and inventory management by restaurants, said Chirag Makwana, head chef at Olive Bar & Kitchen, Mumbai. “We aim to minimise the impact (of rising costs) on our customers but some price increases might be unavoidable. We also consider menu engineering,” he added. The challenge comes at a time when heavy rains in certain regions have impacted footfall.
