To Raise Prices or Not, That is the Question

Instead of crying over the onions, chefs are crying over the cost of cooking oil which has doubled in price recently.

The ongoing effects of covid, ingredient shortages sparked by the conflict in Ukraine, and supply chain issues have all exacerbated inflation and now business owners are having to ask themselves whether to pass these rising costs onto customers or to absorb them.

Unfortunately, the average Kiwi is also struggling and increases in the cost of living have reduced many customers’ ability to dine out.

In a recent survey from the Restaurant Association of NZ, restaurateurs said they are worried customers struggling with the cost of living will stop dining out, yet many businesses need to increase menu prices to cover soaring food prices. 80 percent said they had adjusted their menu prices and half said they were absorbing the costs.

Hospitality is one of the backbones of our society, but there’s a potential storm coming, particularly for more high-end restaurants as people will simply not be able to afford to dine out.

Kiwis want to support local hospitality, but they need to be realistic about how much things cost, we’ve all seen the arguments about what the standard price for a cup of coffee should actually be – and that argument started long before the global pandemic and its residual effects.

Perhaps it’s time for us all to recalibrate what local hospitality is truly worth.