Due to America-Iran war, the taste of fast food may also deteriorate. This is because the supply of commercial LPG in the country is being affected. According to the report of brokerage firm JM Financial, if the shortage of LPG continues like this, then Quick Service Restaurant (QSR) companies may have to face problems. This may increase the cost of these restaurants. Food may become expensive or changes may be seen in the menu. These restaurants include big names like KFC, Burger King, Pizza Hut, McDonald’s and Domino’s, whose business is spread all over the world.
According to the report, big restaurant chains have better supply arrangements than small dhabas or restaurants, but if there is a shortage of commercial LPG or a continuous increase in prices, the entire sector may be affected. This will have a greater impact on QSR restaurants. These companies have hundreds of outlets across the country and require a continuous supply of LPG to maintain their kitchens and menus.
Fast food can be expensive
If LPG shortage continues like this, then companies may have to bear higher fuel costs themselves or may have to increase menu prices. According to the report, in most QSR chains, about 60-65% of the food is cooked on LPG and generally companies keep gas stock for 1 to 2 weeks. If LPG cylinders are not available even for 5 days, a store’s earnings can decrease by about 6%.
India’s QSR sector heavily dependent on gas
LPG is used in India’s fast-food industry to power fryers, grills, ovens and high-speed kitchen machines. The problem may also increase because the government policy has given priority to LPG supply to households, hence in case of shortage, commercial users like restaurants are the first to be affected. It is not easy to adopt induction or other options in many food items, because deep frying and dishes cooked on fire are best cooked on gas only.
Even small shocks can have an impact
The report says that if the disruption in supply continues, restaurant companies will not have much options. In this sector, kitchen work runs very fast and systematically, so even a slight interruption in fuel supply can slow down the service. Companies can reduce the menu and that can affect the earnings. This means that the availability of LPG has now become a very important issue for India’s rapidly growing fast-food industry.
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