KOTA KINABALU: The prices of beverage and food in coffee shops will most likely be increased due to higher cost of doing business, which is further aggravated by the recent fuel price hike.
Sabah West Coast Coffee Shop Association president Yong Chee Yun said the association would be calling for a meeting next Monday or Tuesday to discuss the issues faced by members, including the impact of the increase in fuel price.
“The price of beverage will go up, maybe around 10 sen,”he said, when asked to comment on the effect of the reduction of the fuel subsidy on coffee shops here yesterday.
The Domestic Trade, Cooperatives and Consumerism Ministry has said that the government decided to reduce the current fuel subsidy by 20 sen in keeping with its subsidy rationalization plan.
The new price for RON95 is RM2.30 per litre while diesel fuel costs RM 2.20 per litre.
Yong said the coffee shops were taken by surprise on the announcement of the fuel price hike.
“We only knew about the news around 7pm that the fuel price would be increased after midnight.”
Yong said the reduction in government subsidy for RON95 and diesel would increase the transportation cost of coffee shops’suppliers.
None of the suppliers have reacted to the fuel price hike by immediately revising the price of their products yet, Yong said, though he expected the suppliers to do so at the year end or early next year.
Actually, Yong said the price of supplies had been on the rise since last year due to many factors, including the previous fuel price revision in September last year and new electricity tariff introduced by Sabah Electricity Sdn Bhd (SESB).
“The price of Milo and Nescafe have already increased by seven per cent in May this year because of the increase in fuel price in September last year.”
Suppliers of pastries and breads for coffee shops have also raised their price in April this year, he said.
“Supplier of condensed milk and noodle manufacturers have previously warned us of impending price increase to mentally prepare us for it. This was due to the revision in electricity tariff.”
Yong lamented that coffee shops were finding it more difficult to sustain their business.
He said the cost of operation for coffee shops was already very high due to the minimum wage policy, which is RM800 a month in Sabah, Sarawak and Labuan, and RM900 in Peninsular Malaysia.
“(The revenue) we get from selling drinks can hardly cover our employees’ salaries.”
Assuming that a coffee shop sells RM150 worth of drinks daily, he said. This amounts to RM4,500 a month. If a coffee shop employs five workers, and each has to be paid a minimum wage of RM800, this will total up to RM4,000.
“The burden will be heavy for coffee shop operators who only sells drinks, and lesser for those who provide food as well.”
He added that the electricity bill of his coffee shop has surged to RM700 – RM800 monthly from the previous RM200 – RM300 monthly since SESB revised the electricity tariff.
Yong said the impending Goods and Services Tax (GST), which would be implemented on April 1 next year, would be another ‘headache’.
As to how coffee shops will counter the increase in the cost of doing business, Yong said coffee shop operators would have no choice but to raise the prices of their food and beverages, though they know that such move would affect their customers and business.
“It will affect our business as less customers will go yum cha (for tea), or they will order a bowl of noodle and no drinks, or only order water or Chinese tea. This will particularly affect the working class,”he said.
Sabah West Coast Coffee Shop Association has around 300 members.