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Hotels drop gas for firewood, boil food on runaway costs
Monday March 21 2022
The record high price of cooking gas has added up the running costs of restaurants. FILE PHOTO | NMG
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Summary
- With the sharp increase in prices of cooking oil, chefs have to use oil sparingly.
- Kenya’s hotel business is cut-throat, owing to the high number of outlets concentrated in one location.
- The record high price of cooking gas has also added up the running costs of restaurants, forcing a change in cooking schedules.
When Hassan Ahmed, the manager of Kilimanjaro Restaurant in Nairobi, heard Kenya was relaxing the use of masks in taming the spread of Covid-19, he breathed a sigh of relief. To him it meant more diners, new and repeat, coming to the facility.
On the first day, nothing much changed. Ever the optimist, he figured customers would come back eventually because the change in masking rules signaled that the coronavirus was no longer a threat.
A week later, instead of diners streaming in just as they used to pre-pandemic when it would be hard to get a table at lunchtime, they have dropped off silently.
“We don’t have as many clients as we used. And even though we pride ourselves in serving generous amounts of food, we have had to reduce the portions to save on costs,” says Mr Ahmed.
The increasing cost of food items, cooking gas, and electricity has pushed restaurants to a tight corner. Some are mulling over removing dishes from their menus, serving boiled instead of fried foods to save on oil, while others have ditched liquefied petroleum gas (LPG) for firewood or briquettes.
“Before, we used to cook all the meat in the morning, sure that there would be no leftovers. Now, we boil the meat at once and freeze it, then cook on order. The repercussion is that customers have to wait for a little longer because some foods are not ready-to-serve,” he adds.
Delicate balancing act
He explains that with the sharp increase in prices of cooking oil, chefs have to use oil sparingly, and is thankful that they use chip pans for frying French fries (locally known as chips), as the oil is reused.
“We are yet to increase the prices of food, but we are heading there. We want to be cautious about lest we lose our customers to restaurants selling food cheaply. So we will wait until we confirm that restaurants have started increasing prices, then follow suit. This will also be hard on our clients,” says Mr Ahmed.
Graham Okoth, the branch manager of Java House Kimathi Street, says it is a catch-22 situation, echoing Mr Ahmed’s sentiments.
“What if you add prices and your competitor doesn’t?” Hey says.
Kenya’s hotel business is cut-throat, owing to the high number of outlets concentrated in one location. Therefore customers have many options.
“We have had our customer traffic go down by 25 percent, but our portions remain the same. We usually price our food items based on the inflation rate. When needed, we review them after every six or eight months. Should we decide to, we will only change the prices of specific items, as opposed to every item in the menu,” says Mr Okoth, adding that being a chain, the changes have to be communicated from their headquarters.
“Besides, most restaurants work on a 25 percent profitability rate. When there is inflation, and you lose five percent of your profit, you still have 20 percent to enable you to survive,” he says.
Still in Nairobi’s Central Business District, food portions at Home Lunch Restaurant have also become smaller.
“We have had to reduce our portions, especially on extra servings. We have chopped the popular “ugali sosa” by half, and if a client says they aren’t satisfied and still need more, they have to pay for it,” says Rose Saru, the manager.
Ms Saru admits with a sigh that times are tough. From serving between 700 and 900 diners each day, now the restaurant get between 500 and 600. Not a very bad number, she observes, but she is worried that customers will keep reducing and changing their orders to less expensive meals.
“Already someone who used to order fish for lunch now orders just a cup of tea and a samosa. Most customers say they are facing financial constraints. We figure they only keep coming because they are loyal and want to support us. We are thinking of changing our menus and also raising our prices a bit,” she says.
The record high price of cooking gas has also added up the running costs of restaurants, forcing a change in cooking schedules.
Costly crude oil in the wake of the Russian invasion of Ukraine, the imposition of value-added tax, and the search for higher margins by the dealers have combined to send cooking gas prices to their highest level in Kenya’s history.
The 35kg cylinder now costs Sh8,760 from Sh8,191. Several factors are driving LPG demand growth in Kenya. Better product availability has been a key enabling factor, allowing many households and restaurants in urban areas to switch to LPG for cooking.
In rural areas, most small restaurants and food kiosks are mainly using charcoal and firewood for cooking.
Thinking outside the box
“We’ve had to minimize the usage of gas. Now we cook cereals once a week. We soak and boil large quantities to cover all days of the week so that we save on gas,” she says.
In Nyeri, restaurants are also feeling the pinch as fresh produce sellers increase prices. A 17kg bucket of potatoes has doubled in the last one week from Sh450 to Sh900. Vegetables such as sukumawiki (kales) and spinach have also doubled to cost Sh50 for a kilo up from Sh25.
Ms Beatrice Wairimu runs a garden restaurant, Betty’s Place, in Nyeri town. For the last few days, her waiters have not served French fries, one of the fast-moving food in her kitchen.
The high cost of potatoes and cooking oil pushed her to reduce portions, customers complained, and she stopped making it.
She used to buy a 50kg bag of potatoes at Sh1,200 a few weeks ago, then prices jumped to Sh3,500. A 20-liter cooking oil jellycan was selling at Sh4,000 but now she has to fork out Sh6,000.
“The servings were little considering that we increased the price too. I deliberated on how to remain afloat and decided to remove chips from the menu for now because we were spending too much but no profit,” she says.
In her kitchen, she would buy the 50kg cooking gas cylinder retailing at Sh8,000 but has since shot up to cost Sh11,000.
“We are trying to cut on cost as much as we can and so we have resorted to using charcoal to boil some of the food,” Ms Wairimu says, adding that even at her home she has had to start cooking with firewood.
The restauranteur says Kenya blaming the Ukraine-Russia war is unjustifiable.
“Let us not blame the Ukraine and Russia for the cost of living because it started a few weeks ago but food items have been shooting steadily. The government should boost local manufacturers and farmers to cushion us,” she says.
At the Chicken World Café, Alice Mwangi has had to adjust the size of mandazis and chapati and still increase the price by Sh5. Wheat flour prices rose which millers say is due to limited supplies as Kenya imports about 66 percent of the total wheat that is consumed from Russia and Ukraine.
“A ndazi that was going for Sh25 it is now selling at Sh30 while chapati is selling at Sh35. The café has also reduced the portion of French fries selling at Sh150 due to the high price of potatoes and cooking oil,” she says.
It’s a hard life
“We are hardly making any profits because there are no customers since they have no money to spend. Previously, I could sell over 100 mandazis and donuts in a day. Currently, we are barely selling 50 and 20 chapatis. Life has become hard,” Ms Mwangi adds.
At the Backyard Lounge located on the outskirts of Nyeri town, the proprietor Julie Githinji sa should the prices of food items keep the high trend, especially dishes that require frying, the restaurant will start selling boiled meals.
“We are going to maintain the portion of food but sell at a slightly high price for any meal that requires deep frying. And as the cost keeps soaring we might introduce boiled dishes,” she says, adding “we might even roast more nyama choma to woo customers because it does not require to be cooked on LPG. Switching to charcoal is unsustainable for a restaurant.”
To stay afloat, restaurants have had to seek out new suppliers.
Mr Ahmed says Kilimanjaro had to consider other suppliers offering cheaper quotations.
Hard decisions await
Squeezed by soaring costs, and minimal new customers, the restaurants also thinking of laying off staff and consolidating departments.
“Things have gotten very expensive and when things get to this level, you have to think really hard and make the best decision for your entity,” says Ms Wairimu of Betty’s Place.
The layoffs will hit households hard considering that the hospitality industry is the most affected during the Covid-19 pandemic, claiming over 230,000 jobs as businesses operated under minimum capacity or completely shut down. Most of the employees just resumed working recently.
Reopening of restaurants, relaxing of the curfews and mask rules were to gave a chance to the hospitality industry to rebound, with some staff members expecting lifting of salary cuts.
Ms Saru says that Home Lunch Restaurant management anticipates staff asking for a pay rise.
“We are scared we might lose some employees because of the salary. Bus fares have gone up, we have families to provide for, and some of us have children in school. So you can imagine how hard it must be for the owners of the restaurants. The future looks tough, and we hope food prices will come down,” she says.
