- Restaurant prices rose 6.91% in June, outpacing food inflation at 5.05%
- Eggs and meat saw the highest inflation among food items in five months
- Rising costs include rents, salaries, utilities, packaging, and regulatory fees
Even as restaurant prices have been increasing faster than overall food inflation, a fresh spike in the prices of eggs and meat is adding another layer of pressure on people who like to dine out and the hospitality industry.
The latest inflation data released by the Ministry of Statistics & Programme Implementation (MoSPI) shows that restaurants are already becoming more expensive at a pace that outstrips food inflation. In June 2026, inflation in the Restaurants and Accommodation Services category stood at 6.91 per cent, compared with 5.05 per cent for the broader Food & Beverages category. Consumer food inflation, measured through the Consumer Food Price Index (CFPI), came in at 5.32 per cent.
The data further shows that some of the biggest increases are coming from non-vegetarian food items.
Eggs, Meat See Sharpest Price Rise
Among food items tracked under the Consumer Price Index, eggs and meat recorded the highest inflation in five months. Their prices have risen much faster than many other food categories, making them a fresh concern for restaurants, especially those serving non-vegetarian dishes.
The trend comes at a time when food inflation has already been firming up after remaining relatively subdued earlier this year. For restaurants that depend heavily on poultry, eggs and meat, higher procurement costs could further squeeze margins.
While restaurants do not revise menu prices every time raw material costs move, sustained increases in key ingredients often leave them with little choice.
Why Restaurant Bills Are Rising Faster Than Food Prices
The cost of food ingredients is only one part of a restaurant's expenses.
Every restaurant bill also reflects commercial rents, employee salaries, electricity, fuel, packaging, technology, digital ordering systems, hygiene standards, taxes and regulatory compliance. Most of these costs have risen steadily over the past few years.
Vivek Pathak, Founder Director of NIPS Institute of Hotel Management, says restaurants initially absorbed much of these higher costs to remain competitive. But as inflation became persistent, periodic menu price revisions became unavoidable.
According to him, customers today are also paying for a better overall experience. Restaurants have invested significantly in hygiene, digital ordering, customer engagement and improved service standards. Dining out is no longer just about the food on the plate but the overall experience.
GST Simplified Taxes, But Pressure Remains
Pathak says the Goods and Services Tax (GST) has made taxation simpler and improved transparency for the industry. However, profitability remains under pressure.
A key challenge is that many restaurants are unable to claim Input Tax Credit (ITC) under the current GST framework. At the same time, rentals, manpower costs, utilities and raw material prices have all continued to increase.
With expenses rising across multiple fronts, restaurants are often forced to pass on at least a part of the higher costs to customers.
Will Diners Continue Paying More?
Premium restaurants have generally found it easier to raise prices because their customers are willing to pay for premium ingredients, unique menus and personalised service.
Casual dining chains, however, cater to far more price-sensitive customers. Instead of relying only on higher prices, many have focused on value meals, promotional offers and carefully designed menus to keep customers coming back.
Consumers, meanwhile, have more options than ever before. Regional cuisine outlets, cafes, cloud kitchens and speciality restaurants have expanded rapidly, giving diners choices across different budgets.
According to Pathak, value today is no longer judged only by portion size or price. Customers increasingly look at food quality, consistency, convenience, hospitality and trust.
