Restaurant Industry Stares At Rs 79K Cr Hit...

With the supply of commercial liquefied petroleum gas (LPG) cylinders under stress, the restaurant industry is facing losses of up to Rs 79,000 crore as several chains have started shutting outlets and curtailing menus to remain afloat.

According to an internal survey conducted by the National Restaurant Association of India, that Business Standard reviewed, the industry faces losses of up to Rs 79,000 crore a month as overall industry throughput falls 15 to 20 per cent.

According to the industry body, which represents over 500,000 restaurants across the country, almost 10 per cent of the country's restaurants have temporarily shut down, while 60 to 70 per cent have shifted to induction stoves and alternative fuels, and are operating for reduced hours, and with truncated menus.

According to sources, several big quick service restaurant (QSR) chains are reducing the number of active stores in a particular area. "Several such chains are operating at 50 per cent. If they have three stores servicing one area, they are closing one down temporarily, reducing working hours in the second and letting one operate as is," said a restaurateur who did not wish to be named.

Delivery orders for more than one store are also being fulfilled through just one store, making timelines longer. According to the report, dining out frequency dropped by 8 to 10 per cent, while average per customer spend also saw a decline of 6 to 8 per cent, as choices became limited.

Instances of black-market procurement of cylinders at inflated prices also emerged in several parts.

The restaurant industry is the third largest after retail and insurance in the service segment, with an expected turnover of Rs 6.46 trillion in 2026 and providing direct employment to over 8 million people.

The NRAI estimated that the current disruption could lead to 500,000 to 700,000 job losses in the sector, if the crisis continued unresolved.

"While things have eased a bit, we do not have access to any back-ups anymore and supply remains constricted. In such a scenario, we can only hope that things are resolved soon. The industry has seen a negative impact," the restaurateur quoted above added.

-- Akshara Srivastava, Business Standard