Higher costs, low customer spending threaten mamak restaurants’ future

 

Affected restaurants have had to fire staff, says one operator, as high prices and thriftier patrons dent their bottom line.

PETALING JAYA: Mamak restaurants have been struggling to break even as patrons choose to spend less to cope with the increasing cost of living.

MD Golam Hossain, the manager of Restoran Sultan at Taman Ehsan, Kepong, says it now costs much more to serve the restaurant’s normal menu items, and customers have been complaining since the start of the year.

“We have to explain to customers that the prices of raw materials have increased, so if we don’t increase our prices, how are we going to run our business?” he told FMT.

MD Golam Hossain, the manager of Restoran Sultan, says he has had to explain why prices had gone up to many complaining customers.

He said a plate of chicken biryani with a boiled egg and packet of poppadom, that was RM11 as recently as last year, now costs RM12.

“Last year, 1kg of chicken used to cost RM6.50, but now it costs RM9.50. Likewise for eggs, a carton of grade B or C eggs used to cost RM7.50, now it’s RM12.30,” he said.

These increases, coupled with fewer orders, have resulted in management injecting money to sustain the business and firing staff.

Golam is far from alone in his plight, according to the Malaysian Indian Muslim restaurant owners association.

Its president, Jawahar Ali Taib Khan, said higher operational costs, with rising raw material and energy prices, are “killing the business”.

“All ingredients, even cooking oil, have increased in price. Electricity tariffs have increased, too. However, we still keep our price increases to a minimum,” he said.

According to Jawahar, people are also opting for simpler meals like roti canai and teh tarik, which he says, “fills their stomach without costing them much”.

Asked about the Menu Rahmah initiative (RM5 meals of rice, chicken or fish, vegetable and a drink), he said operators have implemented it as a show of good faith as they were largely making a loss on every plate sold.

“The price of a plate of rice with chicken or fish and vegetables should be around RM10 to RM11, but under Menu Rahmah, it is priced at RM5. It’s part of our corporate social responsibility,” he said.

Jawahar’s concern about costs was exacerbated when the government announced in March that it would do away with direct subsidies for raw materials.

According to economy minister Rafizi Ramli, the government decided to stop these subsidies as they were not deemed helpful in tackling the long-term challenges faced by companies.

Instead, Rafizi said, the government will provide other forms of assistance. - FMT