Hyderabad: From small roadside eateries and mid-sized restaurants to premium cafes and fine-dining outlets, all are feeling the inhospitable impact of the West Asia crisis. Soaring commercial LPG prices and supply shortages have not only pushed Hyderabad’s restaurant industry into survival mode, they have also resulted in a wave of shutdowns.Cloud kitchens dependent on app-based orders and food courts inside malls are among the worst-hit, with many of them scaling down operations or downing the shutters altogether.Industry representatives said the crisis has intensified after commercial LPG prices skyrocketed further on May 1, sharply increasing operational costs for restaurants already struggling with falling footfalls and shrinking margins.On average, the industry estimates that losses could be to the tune of nearly 40%. “Restaurants in the city have already been running under severe stress for months. But in the last one week, the sheer number of restaurants shutting down is very concerning,” said Sandeep Balasubramaniun, president, National Restaurant Association of India (NRAI), Hyderabad chapter.“Not just small eateries, but many fancy cafes and cuisine-specific restaurants across the city are witnessing shutdowns. Several food court outlets in malls too have downsized operations or closed down due to declining sales and rising operational expenditures,” he added.Large food chains with multiple outlets too are feeling the strain. “In the last one week alone, we have had to shut down five outlets, and increase the food prices by 10%,” said Ravi Khandelwal, owner of a popular Frankie chain which runs across malls to metro stations.“We have also had to pull a few of our dishes off the menu. With a steep rise in prices of ingredients, gas supply and packaging costs, our overall costs have gone up from 30% to 50%,” he added.Similarly, Ravi Yelamarti, who used to operate seven outlets of a popular Chinese restaurant chain in mall food courts, said he had to shut two outlets in recent weeks. “The situation has become extremely difficult because fixed expenses like salaries and rentals continue regardless of business. Sales have already dropped by nearly 30%, and we are facing major operational issues,” he said.Even resorting to prices hikes hasn’t helped. “We were forced to increase the prices of some dishes, but this ended up affecting footfalls. If this situation continues, we may eventually have to reduce staff as well,” he added.Another fine dining operator based in Jubilee Hills, speaking on condition of anonymity, said operations have become unsustainable. “We tried our best. We were paying Rs 5,500 per cylinder in the black market, but now it is close to impossible. Running such a large restaurant while managing high rentals in Jubilee Hills is just not viable anymore, so we have decided to shut down,” he said.Even larger restaurant chains are beginning to feel the pressure. Abhik Mitra, managing director and CEO of Paradise Food Court Pvt Ltd, said restaurants were struggling to absorb the sudden rise in fuel costs. “Unlike other cost increases, this cannot be passed on to customers immediately, as doing so risks reducing footfalls and affecting overall business viability,” he said.“On average, our restaurants consume between 100-150 commercial cylinders per day. The recent price hike will lead to a substantial rise in our monthly operating costs. Over time, it could considerably put the squeeze on our margins and create serious financial pressure on the business,” he added.Mohammad Ali from Shah Ghouse said the alternatives like wood fire, induction and infrared cooktops, among others, had slowed down kitchen operations significantly. “We are somehow managing by using wood and other alternatives to keep the restaurants running. But cooking takes much longer this way and customers do not want to wait that much. Business has slowed significantly and we are estimating losses of nearly 40%,” he said.Impact beyond the kitchenThe impact is now spilling beyond restaurant kitchens and affecting workers across Hyderabad’s hospitality and delivery ecosystem. Migrant worker groups say reverse migration has already begun accelerating as restaurants cut working hours and reduce staff.“We are seeing workers leaving in the hundreds every day. With train tickets difficult to get due to the summer rush, many are taking buses from Kompally and Medchal, travelling through cities like Kashi and Allahabad before reaching their villages,” said Raju Ojha, chairman of Bihar Samaj Seva Sangh.Among the worst affected are cloud kitchens and app-based food businesses, according to the Telangana Gig and Platform Workers Union, which said many delivery workers are now being advised to temporarily shift to other e-commerce platforms due to falling food orders.
