How high can they go before business slows?

Although the cost of raw materials has gone up, if F&B operators continue to raise prices, it could deter customers.

MY friend has a strange way of showing support for my recent diet plan – she keeps sending me pictures of food with the caption, “Let’s go for BLR!”

BLR is short for banana leaf rice, one of my favourite meals, but also a meal that I’ve vowed to cut down on, as its main component, rice, with its huge dose of carbohydrates, is a contributing factor to my growing middle-aged waistline.

Thus far, I’ve managed to keep my resolve and stay away from the usual South Indian restaurant that I go to, and my friend has stopped bombarding me with delicious BLR visuals.

Her reason? She’s decided to boycott banana leaf restaurants because they have raised their prices.

“My usual meal on Jalan Gasing, consisting of rice, a few vegetable dishes and a fried fish costs me RM15 now. That’s a ridiculous price to pay for a meal that used to cost RM12, and a few years ago less than RM10. The owner said he was forced to raise prices because his costs have gone up,” my friend told me, adding that she had decided to find alternative ways to get her regular curry fix.

On Tuesday, The Star carried an article quoting the Malaysian Indian Restaurant Owners Association (Primas) as requesting its members to absorb the increase in the price of vegetables, meat, poultry and other fresh produce. Its honorary chairman, Datuk R. Ramalingam Pillai, said members were told not to raise their prices during a recent meeting.

“However, we also understand that our members cannot survive if they continue suffering lower profits,” he said, adding that even the cost of a banana leaf had gone up from between 15 sen and 20 sen a piece two years ago to between 30 sen and 50 sen a piece now.

I sympathise with these restaurant operators, but the fact is, Malaysian consumers have had to put up with a steady price increase over the last few years. A lot of essential items have gone up, and this is most apparent when you dine out.

My usual Sunday kopitiam has increased prices by 10%. I found this out a couple of weeks back when I ordered a bowl of curry mee.

The price, RM6, surprised me as I used to pay RM5.50 before. The old uncle who served me said that all the stall operators in the kopitiam had agreed to raise prices by 10% because costs have gone up.

So, there you have it. The consumer gets hit in the pocket because the price of raw materials has gone up, petrol prices have increased, transportation charges are up, etc, etc.

F&B operators will give you any of these reasons for increasing the prices of their food, but by this logic, if costs actually come down, will they then reduce their prices?

Of course not. What goes up, will not come down. That same bowl of curry mee that used to cost RM3.50 a few years ago is now RM6. And you can bet that maybe next year or even a few months down the line, this bowl is going to cost RM6.30 or RM6.50.

Because of the increase in prices of everyday meals, more and more people are having their food at home, or cooking and bringing packed lunches to work. But these savings from not eating out aren’t really that significant because mar- keting and grocery shopping has also become an expensive affair.

Another friend of mine who helps buy provisions for two charity homes in Klang says she is getting far less for the RM600 budget for a month’s supply. Previously she could buy three types of fish but now that has been reduced to two. From eight chickens last year, she only has enough money for six now and she had to stop buying prawns too as the budget was inadequate.

“I have also stopped buying leafy vegetables as they are too costly. And the higher price for French beans and long beans means we have had to stop buying them for now,” she told me.

I can only agree with her, especially when it comes to the price of fish. My favourite tenggiri or Spanish mackerel used to be RM1820 per kg; it’s now RM30-35. The ikan bulus or whiting that’s really nice to eat when fried, used to be RM4-5 per kg; it’s now RM38 per kg!

Back to the F&B operators: yes, prices of raw materials have gone up, but there should be other means to cut costs and reduce expenditure as opposed to passing them on to the consumer and arbitrarily increasing prices.

Take the recent example of Johor businessman Mohamad Faidzal Zainal who has come up with a way to cope with the high cost of living by offering three packets of nasi campur (mixed rice) and three bottles of mineral water for only RM10.

Mohamad Faidzal introduced the Nasi Muafakat Bangsa Johor at his restaurant Ejohng Concept in Johor Baru last December and needless to say, the initiative has been a roaring success. He now sells 800 packets of rice daily.

Admittedly, Mohamad Faidzal’s offer of RM10 for three packets of nasi campur is really cheap, but F&B operators can still learn a thing or two from the businessman.

Restaurateurs and hawkers can continue to increase prices and risk losing their customers or they can do their best to absorb costs, keep their prices competitive and encourage consumers to be loyal.