AS THE cost of doing business keeps creeping upwards, the association representing proprietors of bistros, restaurants and coffee shops has appealed to its members not to raise their menu prices to show loyalty to their customers.

They were reminded they had only adjusted their menu prices in April when they reopened for business in full after most Covid-19 restrictions were lifted and another adjustment so soon could be bad for business as it would just “scare customers away”.

Appealing to coffee shop proprietors not to raise their menu prices for the time being is Malaysia-Singapore Coffee Shop Proprietors’ General Association president Wong Teu Hoon.

Wong said he is well aware that there are more items that have increased in price and unless they really are unable to absorb losses, he appealed to his members not to raise prices for now.

“I am encouraging them to hold back a little bit. After all, when the prices are adjusted upward, they will not correspondingly adjust it downwards later when food prices fall,” Wong told The Malaysian Insight.

Wong said because of that, any hasty move to keep making adjustments to their menu prices could potentially backfire and drive away customers.

Some coffeeshop owners are reportedly keen on raising their menu prices after the government continued to keep a tight lid on the prices of chicken and eggs.

Wong said since the adjustment on the ceiling price of chicken and eggs was only “a modest increase”, coffee shops and those in the food and beverage industry should be able to absorb the costs.

“Absorb the costs. Avoid burdening our customers with overly high prices,” he said and he also encouraged members to use more A-grade eggs.

From July 1, the standard retail ceiling price of chicken in peninsular Malaysia was set at RM9.40 per kg, while the retail ceiling price of eggs for grade A was set at 45 sen, grade B (43 sen) and grade C (41 sen).

Previously, the maximum retail price of chicken and eggs for peninsular Malaysia for standard whole chicken was RM8.90 kg and super whole chicken (slaughtered and cleaned without legs, head, liver and gizzard) at RM9.90 per kg. The maximum price of grade A eggs was set at 43 sen each, grade B (41 sen) and grade C (39 sen).

Wong said since the ceiling price for chicken is only raised by only 50 sen, or less than 10%, and the menu price for the half boiled egg is between RM1.10 and RM1.20, members should be able to absorb the minimal increase in costs.

Jeremy Lim, vice-president of the Restaurant and Bistro Owners’ Association, said he is well aware what constantly chopping and changing menu prices would have on businesses.

“We do not want to keep raising menu prices. It will only scare our customers away,” he also told The Malaysian Insight.

“It will make dining out more expensive. It will come to a point where they can no longer afford to eat out.”

However, Lim was quick to emphasise that restaurant owners don’t adjust prices to make money but more often than not, it was about balancing income and expenses.

Lim said while the new ceiling prices for chicken and eggs would have little impact on their business as the increase is very minimal, what they fear most is the cost of fuel.

He said if the government cuts its subsidy on fuel, then all prices would automatically increase.

He pointed out that currently their cost pressure is mainly from imported raw materials which are expensive due to the depreciation of the ringgit and higher transportation costs.

“Our restaurants and bars import a lot of foreign raw materials.”

On top of that, higher staff salaries due to the increase in the minimum salary of workers and a general shortage of staff due to the Covid-19 pandemic have added pressure on owners, Lim added.

“As of now, we have not fully recovered from the forced closure brought about by the pandemic. Our monthly operating cost is still being looked at more closely than it was before the epidemic as a slight miscalculation could result in losses,” Lim said.

Even those in the confectionery and noodles industries are saying they will not increase the prices of their products.

Malaysian Bakery, Biscuit, Confectionery, Mee and Kuay Teow Merchants Association president Lai Yee Kei said even though they are in an industry that use eggs heavily, the bread and cookies makers, noodle producers have decided to absorb the increase in costs.

Lai said the increase in egg prices was not their main concern.

“The rise in flour prices is. That had put manufacturers under more cost pressure,” he said.

“Flour price had gone up three times, each time by 10% to 15% and producers have adjusted prices twice, each time by 10%.”

He said the increase in the minimum salary of workers to RM1,500, increase in flour price, have given the temptation to increase the price of their bread or noodles but at the same time association members also fear an increase could see a drop in sales as people tighten their belts and cut spending on food.

“When your products are expensive, no one will buy them.”

Lai also suggested members “look out for one another at this tough time” by sharing their production operations.

“For example, if ‘manufacturer A’, which produces 20 types of noodle products could not meet production targets due to manpower shortage, it’s preferable he gives five of them to ‘manufacturer B’.”

He said the mutual assistance would not only be beneficial to both of them as there would be cost savings and they do not have to scratch their heads where to find workers. – July 9, 2022.