On 1 Mar. 2023, LPG prices of cooking gas cylinder for commercial and domestic use were increased by ₹ 350 and ₹ 50 respectively, across India. From ₹ 1,917 for a 19 kg commercial purpose cylinder, it would now be available for ₹ 2,268, an increase of 18% in Tamil Nadu. Interestingly, the price of commercial LPG is the highest in Chennai at this price due to State taxes and levies.
In Kolkata, commercial cylinders would be available for ₹ 2,221.5, ₹ 2071.50 in Mumbai and ₹ 1769 in Delhi from today.
Critics point out the hike in prices as an aftermath of the State Elections which were held in Feb. ‘23. The last hike, however was done nine months back, in July ‘22 for domestic cylinders. For commercial use, the prices were hiked by ₹ 25 as recently on 1 Jan. ‘23. The commercial cylinders are mostly used at road-side tea shops as well as dine-in a/c restaurants. Due to increase in commodity prices such as sugar, dal and oil, as well as increase in procurement of food grains, grocery, the food retailers have already been absorbing a portion of this inflation.
Post pandemic (while some stay the virus still persists), the cost of labour has gone up significantly, due to demand for semi-skilled employees. Retaining the front-end staff seems to be a huge task for small and medium sized restaurants, especially. Add to that, fluctuating prices of vegetables due to seasonal impact & climate change, the food business is staring at uncertainty from many corners.
Adding salt to the wounds, the delivery business led by the likes of Swiggy and Zomato is finding fewer takers for two reasons – consumers predominantly prefer to visit the restaurants with friends and family instead of dining at home; secondly, the prices for food delivery is higher by 30-60% through online ordering Apps, which many regular customers are shunning away from.
What started off as a great bounce back for Food retailers in Q1 FY 22-23 after 6 quarters of terrible business periods, is turning out to be the not-so best times to be in the food business by Q4 FY 22-23.