Some other restaurant chains said they are taking a hit on profit due to skyrocketing prices, while ecommerce platforms said sales of tomato replacements such as puree have more than doubled.
Wholesale prices of tomatoes have shot up about 288% in a month to now touch ₹140 a kg in some states, as pest/virus attacks and hot weather have impacted production in many areas, according to Nomura economists.
McDonald’s posted notices at some outlets in Delhi, saying, “For the time being, we are forced to serve you products without tomatoes.” The US burger-and-fries chain attributed “temporary unavailability of tomatoes” to “seasonal crop issues arising out of farm fields” in a few regions. “There are not enough quantities meeting our quality specifications available,” said a spokesperson of McDonald’s India (North & East), insisting the move is not due to the surge in prices.
Many other restaurant chains said soaring prices of tomatoes and other vegetables are hurting their profitability. Nobody is talking about increasing prices on their menu, though.
Online trends
“We are taking a hit on profits, but we have to maintain taste for our consumers,” said Zorawar Kalra, managing director of Massive Restaurants, which operates Farzi Cafe and Masala Library chains. “We are hoping this will be a temporary phenomenon.”Meanwhile, some ecommerce platforms have reported a surge in sales of tomato purees and ketchup. “Tomato puree sales are now 120% higher than in the first week of June; tomato ketchup sales are 10% higher than in the first week of June,” a spokesperson for quick-grocery delivery app Zepto said.
Zepto is also sending mailers to consumers saying it is selling tomatoes at “non-inflationary prices,” apart from running coupon schemes. “Get tomatoes at Rs 49 for 500 gm on Zepto,” said one of the platform’s mailers.
BigBasket, too, is selling tomatoes at “discounted” prices for the time being.
June inflation
Rising tomato prices are unlikely to have a significant impact on inflation as its weightage in the basket of products used to measure consumer inflation is a negligible 0.57%. However, economists pointed to a spillover impact on other vegetable prices. Rising vegetable prices, they said, may have a bearing on inflation as vegetables have a 6.04% weight in the overall retail basket.
