Pizza and Burger lovers have to settle a bit unhappy with the recent budget which was submitted by the Finance Minister on the last day of February. Pizza and Burgers will cost more and see a 5-10 % hike in their prices in the coming financial year (April 1, 2013- March 31st, 2014). May it be sizzling zinger burger or flavored crust pizzas, it is obviously going to hitch the budgets.
The Finance Minister in his budget has announced a service tax of 12.36% on all air-conditioned restaurants, and the leading café and restaurant owners are now left with no choice other than hiking prices. Moti Mahal, Costa Coffee, KFC, and Pizza Hut say that they may increase the prices even if it is going to leave a deep impression on the consumption rate. The price hike may also cause a fall in transactions for a small term because of a negative consumer sentiment.
Mc. Donald, the top burger and fries chain, says it is yet to decide on the quantum of price hike. Discretionary spending will certainly face high pressure with increased prices and it is the common man who has to shoulder the burden. The 12.36% hike will come under the 40% section of the bill, whereas the remaining 60% is considered to be the actual cost of the food. The net increase in the billing price will be 4.95 % with the recent hike.
The “Indian Restaurant Report 2012” has estimated a growth rate of Rs. 75,000 crore and expects it to grow to Rs. 1, 37,000 crore in 2015 at a rate of 17 per cent. However, the last two quarters saw a declining growth due to poor consumer sentiments. The top food chains in India have also reported a slow growth in the last two quarters.
The National Restaurants Association of India is now trying hard for talks with the Government seeking a roll-back of taxes. Consumers have to shell-out 17-25 per cent extra, in addition, to the VAT and service tax, if the move is implemented. Inflation rates are high, and so is the cost of every article, it is no wonder that the Government has planned such a move. Government plans, businesses execute, but at the end of the day it is the consumer who feels the pain of the pinches.