Pune: Despite ‘30% increase in costs’, restaurant owners reluctant to hike menu prices

Ganesh Shetty, President of Pune Restaurant Owners’ Association said, “The restaurants want customers to return. Increasing menu prices at this junction may shoo away customers.”

Last 18 months have been tough for restaurant owners with the Covid-19 pandemic and the subsequent lockdowns causing business disruptions. Many restaurants, surveys peg it at 30-40 per cent, have also shut down during the period. Those that survived the pandemic are now bearing the brunt of the high costs of cooking gas, oil, vegetables, meat and groceries but are reluctant to pass on the burden to the customers.

Restaurant owners and union leaders said that there has been a 30 per cent overall increase in the food costs on account of rising prices. Cooking oil (10 kg can now cost Rs 2,200 compared to Rs 1,300 a year ago), cooking gas (19 kg commercial gas cylinders cost Rs 1,800 now compared to Rs 1,100 a year ago) are the major contributors to the woes of the restaurant owners.

Apart from this, the cost of meat and vegetables have also gone up in the last few weeks due to cyclical and other topical reasons.

“There has been a 30 per cent increase in the food costs in the last six months,” said Ganesh Shetty, President of Pune Restaurant Owners’ Association. “While prices of meat and vegetables may come down in a few weeks with the fresh harvest, rising prices of cooking gas and oil are worrisome,” he said.

Shetty said despite increased costs, eating into the profits, most restaurant owners are unwilling to pass on the burden to the patrons.

“We are slowly reopening after almost two years. The restaurants want customers to return. Increasing menu prices at this junction may shoo away customers. Many owners are wary of this and hence despite the pressure caused by costs, most are not willing to revise the prices just as yet,” said Shetty.

Raj Jaiswal, co-owner of ‘Yaron Da Adda’, Wakad, said, “Prices of vegetables, groceries are burning a hole in our pockets but we have decided to wait for a couple of months before the prices can be upwardly revised. At present, we are bearing the brunt of the price hikes.”

An executive with ‘Petpooja’, the software company which provides billing management services to restaurants, said very few restaurants have opted to revise their menu prices.

“Restaurant operators are afraid that they will lose customers if they increase the prices. Earnings of people have suffered due to the pandemic and many owners feel that if they increase the prices now, it will spoil the chances of customers returning to their establishments. Most may increase the prices after a few months after business stabilises and if the costs remain high,” said the executive.

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