Price hikes on table for restaurants and cafes

Since January this year, raw material costs for restaurants have risen between 5% and 20% as vendors are renewing contracts at higher rates given the rising inflation.

The company’s current food and beverage price varies from Rs 300-600 on an average across all its brands. (Representative image)
The company’s current food and beverage price varies from Rs 300-600 on an average across all its brands. (Representative image)

Diners may soon have to shell out as much as 15% more when eating out as several eateries across Metro cities are planning to increase prices to offset the impact of rising raw material costs. Since January this year, raw material costs for restaurants have risen between 5% and 20% as vendors are renewing contracts at higher rates given the rising inflation.

“When it comes to our restaurants, The Bombay Canteen and O Pedro, we have seen an 8-11% increase in input costs since January 2022. These include increase in ingredient costs, beverage and fuel prices,” said Yash Bhanage, founder and COO of Mumbai-based Hunger Inc Hospitality. Acknowledging that there will be a price hike at the restaurants, Bhanage said instead of a blanket price increase across all items on the menu, the company will look at the input or ingredient cost for each dish and hike prices accordingly, adding, “The cost of vegetable oil, for example, has gone up by 80%, which impacts the entire menu.”

Bengaluru-based VRO Hospitality has witnessed a 5-6% increase in raw material costs at its restaurants and bars Badmaash Lounge, Hangover, Plan B, Nevermind, Cafe Noir, Taki Taki and Tycoons this year. “Looking at the current trend and with revenue growth not in line with our regular statistics, we are looking at increasing rates by 5% to mitigate rise in inflation costs,” said Asif Syed, CFO, VRO Hospitality. The company’s current food and beverage price varies from Rs 300-600 on an average across all its brands.

At Roastery Coffee House, which has outlets in Noida, Kolkata and Hyderabad, the raw material costs have gone up by 20%, according to the cafe’s founder Nishant Sinha. “Our dishes are priced in the range of Rs 150-450 and we work on low margins,” Sinha said, adding that they will increase prices by 10-15% soon.

Kolkata-based Chowman Hospitality increased prices at its restaurants Chowman, Oudh and Chapter 2 by up to 5% in May following an overall rise in input costs. “We had to increase prices, but we did it only by 3-5% as affordability comes first for us,” said Debaditya Chaudhury, MD, Chowman Hospitality.

Many eateries are playing it safe similarly by increasing prices marginally. “We have witnessed as much as 10% increase in input costs since January. The major reason is unavailability or limited supply of consumables and perishable items,” said Akshay Anand, co-founder of Cosy Box, a multi-cuisine restaurant in New Delhi. But adds they will not increase prices by more than 5%.

Rajan Sethi, founder and MD, Bright Hospitality, said the industry has witnessed an 18-20% rise in raw material costs since the beginning of the year. However, the New Delhi-based company, which owns restaurant brands OMO, AMPM, The GT Road and Ikk Panjab, is not planning any change in its menu prices.

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