Consumers are responding to price hikes

REFERRING to the report “Eateries shortening hours” (Sunday Star, April 14), it is evident that changes are afoot in Malaysia’s dining scene.

Over the years, Malaysians have grown accustomed to eating out, with Malaysia earning recognition for its diverse culinary offerings available around the clock.

Mamak stores, in particular, are renowned for opening almost 24 hours a day.

However, despite official claims of inflation being maintained at 2.4%, it’s widely acknowledged that prices of food have surged, with some items seeing a staggering 30% increase and, in some cases, doubling or even tripling in price.

Compounded by sluggish adjustments in salary increments, especially for civil servants, this surge has led to prolonged complaints from Malaysians.

The solution to mitigating the effects of escalating food prices lies in reducing dining out and making necessary adjustments to cook and pack meals for work and school.

In Economics 101, price elasticity refers to the responsiveness of the quantity demanded to changes in prices. Essentially, adjustments become feasible in the long run.

Increasingly, we’re witnessing the long-term effects of this elasticity on dining out habits. Restaurants and food stalls are experiencing reduced sales, even during festive seasons like Hari Raya. Malaysians are changing their dining habits, driven primarily by higher food prices and, hopefully, a growing interest in healthier living.

But what happens to food entrepreneurs amid this shifting landscape? In the coming months, we anticipate another Economics 101 principle at play; when producers can no longer cover their variable costs, they will exit the market.

In simpler terms, many food businesses may shutter, exacerbating economic and social woes as unemployment rates climb.

But Malaysians are resilient. Many are exploring opportunities across borders in countries like Singapore, drawn by higher wages and favourable exchange rates. This potential exodus underscores the need for immediate action from policymakers to shore up Malaysia’s economy and retain its workforce.

In light of the changing tide, it’s imperative that we address key issues, including improving foreign exchange rates, bolstering the ringgit, upskilling our workforce, and diversifying our industries.

The writing is on the wall, and it’s clear that economic principles of elasticity will continue to shape our future.