Even before Cyclone Yasi hit the coast of Far North Queensland, banana prices had been hiked up to $7.00 a kilo amongst large supermarket chains.
Call it a pre-emptive strike, call it savvy economics based on the predictions of the Bureau of Meteorology, call it really bloody unsubtle, call it daylight robbery. It is what it is. And whether you like it or not, demand and supply is king.
Supermarkets have no problem with passing the buck (or lack thereof) onto the consumer. And, as demonstrated with Cyclone Yasi – even weeks before the effects of natural disasters are felt, they are able to protect their bottom lines with premeditated price rises.
Naturally this caused outrage within the community. As consumers, we exercised the power of choice and boycotted the gargantuan culprits, turning in favour towards our small, local independent grocers, who actually have a conscience and do not have the lion’s share of consumers (and suppliers) wrapped around their little fingers – therefore being able to use, and subsequently abuse, their power.
It’s just way the cookie crumbles. Big companies pull the strings and call the shots. Smaller, independent operators resist shonky tactics, but eventually the simple rules of demand and supply do prevail – and what there is a shortage of rises in price.
And there’s much more where that came from too, what with more than 75% of Queensland having been declared a disaster zone over this most tempestuous summer. It’s the ‘fruit bowl’ of Australia, not to mention amongst the largest producers in the world of that integral ingredient known as ‘sugar’.
Well, it’s all very well that supermarkets can pass the sting onto you. There’s the smallest comfort in being able to put a reason to it (i.e. category 5 cyclone). It’s right there in your face though, and although annoying – at least you can rationalise it.
Unfortunately however, the same opportunity to directly pass on price increases to the consumer does not exist in every industry.
Supply shortages (the kind that make supermarkets hike their prices) affect the food industry on every level. This particularly applies to your local restaurants. Wholesale prices rise in a similar fashion to retail prices. The prices of essential and basic ingredients can, and do, escalate sharply – sometimes without warning. Natural disasters, shipping issues, CPI increments and various other things all add up to steep and painful increases.
Food costs rise sharply as a result, leaving narrower profit margins. What is the solution, you may ask? Hike up prices in a supermarket fashion? It’s not that simple …
People may grumble about paying more for bananas, but at the end of the day they buy them. But many of us take enormous offence at escalated menu prices. And for that matter, the same offence to that other cost-cutting restaurant solution – smaller portion sizes. Or in the same family – perhaps using frozen instead of fresh, substituting an inferior cut of meat …
So much offence is taken, that a refusal to dine in such a restaurant is not an infrequent occurrence.
But at the end of the day, a business operator who wishes to stay afloat amidst ever increasing prices, yet still retain their quality, integrity and reputation – has no choice except to do the same as everyone else. That is, pass the cost on to the customer.
Perhaps it’s because a restaurant is one step further away on the food chain, that prepared food on a plate is a world away from the banana trays at Coles, which is the reason that many do not see the connection. Or, that many folks have a natural suspicion of prices on menus, and their connection with the value they perceive is already dubious.
On the other hand, smart operators can do a lot to keep food costs down – keeping to seasonal ingredients, using every part of a cut of meat for example. But unfortunately there’s some cost escalations which just can’t be worn and have to be passed on in order to deliver the same quality and just to keep the doors open. Sadly, this means you will keep paying more in the supermarket and more in your favourite restaurant.
On the bright side, however … we restaurateurs don’t have enough time on our hands to scour the Bureau of Meteorology’s website and re-print our menus when we see a tropical low heading our way!