Restaurants and hotels in Asia face a difficult choice between suffering losses due to rising ingredient costs, or increasing menu prices and risk losing loyal customers…

The spike in raw material prices started from a supply chain breakdown during the Covid-19 pandemic. Now, this problem is compounded by more difficulties for businesses and consumers because of the war in Ukraine. For households in Asia, this makes them feel pressured because going to restaurants – with the advantages of quality and affordable prices – is an indispensable part of life and contributes significantly. for the economy.

On September 20, the Ministry of Internal Affairs and Communications of Japan released a report showing that the country’s consumer price inflation in August increased to 2.8% – the highest level in the past 8 years. in the context of high raw material costs and yen depreciation. This is increasing the cost of living for households.

In early September, the yen hit a 24-year low against the dollar, adding to the pressure on consumers in the world’s third-largest economy, which is already grappling with rising prices, the Japan Times reported. groceries and fuel. Rising labor costs are also a challenge for the restaurant industry as it becomes more difficult to recruit staff as many restaurants cut their opening hours or close temporarily under the impact of the Covid-19 pandemic.

According to a survey of 122 Japanese restaurant chains conducted by private credit research firm Tokyo Shoko Research, as of early September, 71 companies have raised prices or announced plans to raise prices this year. . Japanese restaurant chain Yayoiken, which operates more than 360 eateries nationwide, has been charging higher fees for dishes since September due to rising prices of imported beef and pork. Restaurant chain Denny’s also raised prices on some menu items from September 6 and said it’s been difficult to strike a balance between price and quality amid soaring ingredient costs.

Meanwhile, in South Korea, rising food prices are also putting pressure on consumers’ wallets. According to South Korean government data, the average price of fried chicken – a popular dish in the country – rose 11.4% in August compared with the same period last year. The figure is also higher than the increase of other popular food items such as kimchi stew or roast beef.

According to Yunjin Park, senior food analyst at Euromonitor, Korea’s top fried chicken chains have increased menu prices by an average of 2,000 won (about $1.50). This, she estimates, causes the price of fried chicken to increase by about 10% to 15%. This change may not seem like much, but it will cost customers nearly 22 USD for a simple meal. “Koreans used to be able to eat fried chicken freely, but now it’s not something that can be ordered easily without consideration,” Park said.

According to CNBC, one of the reasons that South Korea faces such inflation problems is that it has to import nearly half of its food. In June, economists at Euromonitor warned that South Korea was one of the Asian economies most at risk of rising prices in the world because of its dependence on other countries for a wide range of products. food. In addition, Singapore, the Philippines, and Hong Kong are also vulnerable.

And now, it has come true. Profits of the spicy hot pot restaurant Ma Hong have dropped 20% since it opened in central Hong Kong last year. The reason is that the price of beef three only increased by more than 50% and the cost of other ingredients also increased. “We’re not raising prices on the menu because inflation is affecting everyone. In Hong Kong, we’re not the only restaurants that suffer,” said Mr. Ma.

Located near the flashy shopping malls along Singapore’s Orchard Road, Adina Serviced Apartments decided to attract visitors by offering their guests free popcorn and drinks. Just last month, this hotel gave away $72 meal vouchers to customers. “After the pandemic came inflation, and the absence of tourists had a significant impact on us,” said a representative of this accommodation facility.

In Thailand’s Koh Lanta island district, the five-star Pimalai Resort and Spa is offering up to 30% off for travelers looking for a getaway near the coast. Right next to that, Pimalai Resort also implements a 5-night 4-night stay program with visitors from the Asia-Pacific region. It can be said that many hotels in Southeast Asia are launching a series of marketing campaigns to attract tourists. In Bali, the resort InterContinental offers a 20% discount on laundry service for guests with long-term bookings.

However, according to Nikkei, there is no guarantee that these efforts will succeed. Entry restrictions may have been eased, allowing for a revival of tourism, but it is worth noting that travel demand is likely to fall due to high fuel costs, which in turn drags on the cost of food. Drinking and shopping also increased. Michael Marshall, Commercial Director of a popular resort in Malaysia, said: “There has been a strong focus on marketing campaigns in each region to maximize profits. However, the price of the resort. The increase in dining and travel makes the room rate reduction seem unimpressive enough for visitors.”

Currently, many different strategies are being launched by governments, from eliminating student debt to raising the minimum wage… to minimize the impact of the cost-of-living crisis on people. Japan raised the minimum wage to a record 3.3% in the fiscal year ending March 2023. The government is also trying to control it so as not to increase the price of wheat for export and reduce the impact of inflation on the people.

“Business is very difficult because of high prices, people stay at home, not go to restaurants anymore. Hopefully, the government will create a favorable environment, encouraging people to eat and consume more,” she said. Yuuka Tamagawa, Restaurant Manager, Tokyo, Japan, said. The Malaysian government is also expected to spend a record-high $17 billion in subsidies and cash aid this year to cushion the impact of rising prices.

Source: VnEconomy