UAE | General
Small restaurants find rising food costs eat into their profit margin
Small and medium restaurants said the expected price rise of rice and pulses due to an export ban by India and Pakistan will eat into their their profit.
- By Binsal Abdul Kader, Staff Reporter
- Published: 00:05 April 3, 2008
Abu Dhabi: Small and medium restaurants said the expected price rise of rice and pulses due to an export ban by India and Pakistan will eat into their their profit.
They said they cannot simply increase prices like big restaurants do.
Ahmad Shameem Abdul Kareem, an Indian who manages two restaurants in Abu Dhabi, said the price of basmati and non-basmati rice have been raised by more than 30 per cent recently.
"Altogether the price rise in the last six months was about 150 to 175 percent," said Ahmad, who manages Al Ridha Restaurant on Electra Street and Darbar Restaurant on Salam Street in Abu Dhabi. "But we raised our prices by ten percent only, from the beginning of January this year."
Still, initially there was resistance from customers," said Ahmad, whose family has been i the restaurant business since 1983.
"Vegetable prices recently decreased a bit." He said they are thinking of a five to ten per cent increase in their prices, but have yet to finalise it. "We cannot increase prices in one go, as most of our customers belong to the middle class with salaries in the region of Dh 3,000 and above.
"We can increase prices only gradually, otherwise customers will resist it."
Naser Oorakam , an Indian who runs restaurants in Dubai and Ajman, said prices of basmati and non-basmati rice were increased by 150 and 120 percent respectively in the past one year. "But, we cannot increase the prices of our dishes in that proportion," he pointed out.
"We increased the price of biryani with basmati rice from Dh6 to Dh7, and meals with non-basmati rice from Dh4 to Dh5, said Nasser, who runs Hira Restaurant at the Bur Dubai bus stand and in Ajman town.
"Still, we are able to sustain our business thanks to one favourable factor, increasing business due to an increasing population."
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