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Inflation leaves diners with bad taste
Vientiane restaurants are rethinking their business operations and pricing strategy in a bid to tackle rising prices as inflation continues to bite.
Many restaurants are now informing their customers they have to put up their prices. If they don't, they simply won't be able to survive, as the price of almost every food item, including vegetables, pork, fish and beef, continues to rise.
In major Vientiane markets, pork has risen from 25,000 kip to about 32,000 kip per kg over the past few months. Beef is now about 40,000 kip, up from 28,000 kip per kg over the same period.
A noodle shop owner in the Nam Phou fountain area of Vientiane has put up the price of a bowl of noodle soup from 10,000 kip to 12,000 kip. She explained that she was reluctant to do this as she didn't want to upset her customers, but if she didn't her business would no longer be profitable.
She said she realised the upward trend in food prices was the result of the higher price of fuel in the domestic and world markets.
Some restaurants in the capital have managed to fend off a price rise, but have made changes in other areas. Some are trying to cut operating costs, while others are simply putting less food on customers' plates.
They say they don't dare to raise their prices as they know competition in the business is tough and they don't want to lose customers.
The owner of another restaurant in central Vientiane said she could no longer offer customers an extra helping as she used to. She also said that some customers were paying more money to eat the same amount of food.
Most of her customers were bank staff and government officials who earned a decent income, so they were happy to pay more to pile the food on their plate, she said.
According to the National Statistics Bureau, inflation reached 7.73 in March. The Ministry of Industry and Commerce estimated that inflation would hit 8 percent in April, the month of a major festival and widespread partying.
The main driving forces of inflation are rising fuel and food prices, according to economists at the Lao National Economic Research Institute. However, many business operators, especially those working in construction, say inflation is also the result of management policy concerning the supply of consumer goods and materials.
They said the surge in the price of cement in recent months is due to the short supply of construction materials. Most of the cement made in Laos is bought up by power plant developers and major construction projects.
When the price of some goods rises, it affects the price of other products, especially food. This hits the general population hard, as food is the most essential item for every household.
vientiane times
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