Prohibitive costs put restaurateurs in a dilemma
High restaurant bills are keeping patrons at bay with some lamenting that electricity, transportation, and gas price decreases have not been passed on to the customers by the owners.
Certain owners of restaurant establishments the Business Times spoke to said that their costs are very prohibitive in terms of increasing taxes. They are also under stress with the four different taxes they need to pay the government. The Colombo Municipal Council rates, Tourism Development Levy, Value added Tax, and Service charge are the four taxes.
However, some people who used to eat out at least three, or four times a week noted that, the restaurants have got some of their costs down owing to some government policies. “The fuel costs are down because the liquid petroleum gas prices have decreased. But they have not been passed down this benefit to the customers. On top of that, the final bill is also taxed heavily,” a senior banker who had refused to eat at one particular establishment after scanning the menu, told the Business Times. Similarly, a medical professional had also left a restaurant after seeing the prices.
Ijaz Ahmed, Owner of The Beans Coffee Factory sourcing coffee for most coffee houses, told the Business Times that restaurants his company source coffee to have told him that their overhead costs such as staff salaries and rents have gone up. “They said that when prices come down due to the high-interest rates decreasing etc the food costs will also come down and they can reduce the bills, but it will be a gradual process.”
Apinash Sivakumar, Owner Isso restaurant said that suppliers have still not reduced costs. “It really comes down to the suppliers. If they drop their prices, we can reflect that in our billing. But none of the suppliers is reducing their prices.” He also pointed out that some restaurants have high debt. “We have debt borrowings which we did during the crisis. The interest rates despite dropping slowly are still quite high for these.”
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