Restaurants struggle as costs surge, sales drop by up to 30%, owners say, seek govt action

Bangladesh’s restaurant sector faces mounting pressure from surging food and raw material prices, utility and fuel costs, wages and other operating expenses, driving overall sales down by up to 30%, the Bangladesh Restaurant Owners Association (BROA) said today (3 October), calling for government action. 

Restaurants are struggling to remain viable because they cannot fully adjust food prices to match rising costs, fearing further customer loss if they raise menu prices, BROA Secretary General Imran Hasan said at a press conference titled ”Restaurant sector in severe crisis amid rising commodity prices and demands for resolving the crisis” in Dhaka. 

According to the association, prices of major food items, including rice, pulses, edible oil, meat, fish, spices, vegetables and eggs, have increased. At the same time, restaurants are facing higher costs for gas, electricity, LPG, water, rent, transportation and labour.

Operating costs are continuously rising, but most restaurants cannot increase food prices accordingly, the association said.

It added that restaurants face a difficult trade-off, as raising prices could drive away customers while keeping them unchanged is squeezing profit margins amid rising costs.

The BROA said the restaurant sector is not merely a business segment but an important source of employment and a vital part of food services and the urban economy.

It called for a review of existing policies and the sector’s cost structure to protect jobs and ensure safe, quality food services.

Nine-point demand placed before govt

The association placed nine demands before the government to address the crisis, including immediate implementation of a one-stop service for restaurant businesses and an end to district administration intervention in adjusting food prices amid rising costs.

It also demanded an end to what it called harassment by government officials over VAT collection, along with the withdrawal of the 10% supplementary duty and 2% withholding tax.

The association called for an urgent resolution to LPG and fuel shortages and measures to reduce load-shedding.

It also demanded an end to harassment and unnecessary financial penalties during inspections by government agencies.

The association further called for formal recognition of the restaurant sector as an industry, a dedicated industrial policy and mandatory membership in the restaurant owners association.

Other demands include allowing beef imports; ensuring a business-friendly environment free from harassment and extortion; and providing training and incentives for restaurant workers.

The association said implementing the demands would help address the sector’s current difficulties, protect jobs and improve the sustainability and quality of Bangladesh’s food-service industry.