DINING out could cost more as restaurants prepare to raise prices due to skyrocketing prices of raw ingredients and the unresolved issue of labour shortage, business owners said.

Restaurateurs told The Malaysian Insight price increases are no longer limited to vegetables, but are also affecting other ingredients such as seafood, cooking oil and sugar.

The ongoing labour shortage is also driving wages up, adding to overhead costs that have increased by up to nearly 40%.

Jawahar Ali Taib Khan, president of the Malaysian Muslim Restaurant Owners Association, said its members have agreed to maintain prices for this month, but will soon discuss a revision for next year.

“We have no way of knowing how much prices will go up. On top of that, workers’ salaries and various other expenses have gone up as well,” he said.

“We hope to maintain the prices on our menu but the operating costs have gone up by nearly 40%. We don’t know if we should continue maintaining prices.

“Some members are already saying they can no longer do so as business is not getting back to normal.

“The lack of manpower is our biggest problem.”

Jawahar said labour shortage is the main reason why food prices are going up drastically. Many lost their jobs during the pandemic but now that businesses have reopened, hiring foreign workers is proving to be difficult, impacting many other sectors along the business supply chain.

Tony Lim, a spokesman for the Malaysian F&B Operators Alliance, concurred that the foreign worker shortage is one of the biggest problems, apart from higher prices for vegetables, chicken and sugar, as well as freight fees.

“Locals aren’t applying for jobs with us (restaurants).”

The foreign labour shortage was caused by the government’s freeze on migrant labour intake during the pandemic. Although foreign workers are being allowed in again, priority is given to the agricultural sector, especially oil palm plantations.

Lim, who is also the owner of the Boat Noodle franchise with 42 branches nationwide, said his outlets in the Klang Valley, Johor, Kedah, Perlis, Penang and the east coast are facing a 30% shortage in manpower.

“Many employees went back to their hometowns and changed jobs during the lockdown.

“Now that the crowds are returning to restaurants, these employees are not willing to come back to their old jobs.”

Lim added that although restaurateurs are having a hard time keeping up with increasing costs of raw materials, they cannot afford to pass on more than 10% to customers.

“Any higher and it will drive customers away. We are trying other ways: to adjust the amount of food, or come up with a new menu to lower costs,” Lim said.

Restaurants also cannot adjust prices month by month, and can only do so every quarter.

Price hikes by nearly 200% for vegetables made headlines a few weeks ago. The problem was attributed to a combination of reasons such as higher costs of fertilisers and pesticides, weather, transportation and logistics costs and labour shortages.

Lim said all these problems are depressing profit margins for restaurants, even though patrons are returning now that lockdowns have been lifted.

President of Malaysia Koo Soo Restaurants and Chefs’ Association Wong Teu Hoon said restaurants are now buying seafood at much higher prices.

Prices for some types of seafood have even gone up by 100%. This includes delicacies such as fish maw and sea cucumber.

He said restaurants are hesitant to increase prices as customers don’t understand the reasons why.

Covid standard operating procedure, such as social distancing in restaurants, will also affect prices, Wong added.

For example, Chinese banquets that usually seat 10 people at a table, can only accommodate six people now, which means customers will pay more for banquet sets that used to cater for 10 people.

“Due to social distancing, one table can only accommodate six people, meaning customers will pay more and will not be happy about it,” he said.

Wong, who is also the president of the Malaysia-Singapore Coffeeshop Proprietors Association, previously indicated that drinks like coffee or tea and other beverages at traditional coffee shops will cost up to 60 sen more from next month to help the owners manage rising operating costs.

He said the price will increase 20-30 sen in rural areas and 40-60 sen in urban areas. – December 15, 2021.