Monday, 12 October 2009

Falling profits hit Indian restaurants

By Ben Aulakh

A lethal mix of the recession and rising food prices are taking their toll on Indian restaurants in Leamington Spa.

Three premises in the town, King Baba, Five Rivers and Rozana have all seen their profits badly hit in the last year.

Mr Aslam, owner of the King Baba, Bath Street said, “The prices of rice, chicken and meat have doubled over the past year.

“In the last 3 months I have lost £5000, in the 14 years I have owned a restaurant this is the worst it’s been.”

The rise in staples prices has been blamed on more land in the Far East being set aside for bio fuel crops and livestock grazing, and the damage done to rice paddies by drought.

Mr Aslam added, “We depend on these ingredients, the business sells rice, chicken meat and food, that’s what we do.”

It is a similar story at Rozana, Augusta Place, owner Sheba Kadir said, “Profit is being hit big time, everyone in the marketplace wants deals so we spend the money we have got giving deals.

“We are struggling to survive and at the moment there is no profit.

Rasoi, a restaurant on Victoria Terrace has, in the last year, ceased trading.

Five Rivers, which is also on Victoria Terrace, has fared better than its competitors, manager Ravi said, “Prices have gone up quite a lot, about 20%, but we can’t decrease the food quality so we haven’t changed our menu, therefore profit is less.

“But our business has been pretty constant; there has been no real decrease in customers.”

All three restaurants have absorbed the increased costs and have so far refused to put up prices.

Sheba Kadir added, As a business we are a pleasure, a treat, we are not a necessity, if you don’t have a job the money goes on the house and children.

“If we all of a sudden put up prices the customer will run away.”

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