UK inflation serves up pain for Chinese restaurants

With inflation hovering at 40-year highs in Britain, the owners of Chinese restaurants and supermarkets are sharing in the pain felt by the broader commercial sector.

From cooking oil to other imported food and ingredients, these businesses can't escape the soaring costs that are weighing on the British economy. With the nature of their businesses, Chinese restaurants and grocery stores rely heavily on logistics, with the long-distance sourcing of the food and products their customers expect.

Inflation in the UK soared to a 40-year high of 9 percent in April, up from 7 percent the previous month, with food and energy prices the main drivers, according to figures from the Office for National Statistics.

British households of all income levels have faced similar rates of inflation, but rising prices are now hitting the poorest people the hardest because they have to spend far more of their household budget on gas and electricity, said think tank Institute for Fiscal Studies.

Currently, energy bills are the most significant contributor to inflation in Europe, including the UK. Oil and gas prices remain high, with average gas and electricity prices having gone up 53.5 percent and 95.5 percent respectively, compared with a year ago. Fuel prices are also pushing up the costs of raw materials, household goods, furniture, restaurants and hotels.

Sai Qi owns the Real Beijing restaurant in London's Chinatown. He said the impact of the cost of living crisis first became apparent at the end of last year. Many ingredients for Chinese restaurants are shipped from China and gasoline prices have risen since then, making logistics more expensive.

"I have been running a restaurant for more than 10 years, and this is the first time I have encountered such (high) inflation, the first time my restaurant has encountered such difficulties," he said.

"Before the epidemic, a shipping container cost more than $1,000, and now it has soared by 10 times, so you could find that it is hard to buy Tsingtao beer in the UK now, because the freight is more expensive than the beer itself. We cannot (import it) at all and cannot sell it anymore."

In order to deal with inflation, Qi had to reduce costs in any way he could, such as canceling some dishes from the menu. "Like crayfish－we had to cancel it", he said.

"Inflation is fatal to the catering industry. For example, green vegetables have risen by 20 percent to 40 percent. What is the most worth mentioning is edible oil. The demand is huge all the time from the restaurant kitchen. We usually consume 30 barrels each week. During the epidemic, a barrel of edible oil was 17 pounds ($21.40), which has now increased by 1.5 times."

He added that due to the rise in logistics-related costs, staff wages will also have to go up. And with energy expenditures such as electricity and gas, "basically the total cost increases by 40 percent to 60 percent".

For Chinese supermarkets, the situation is similar.

Grace, manager of Chinese supermarket YoHome in London, said she was trying to keep costs down as much as she could, but the reality is that they cannot escape increasing food prices, as Chinese supermarkets depend on imported food.

"Before the pandemic, the price of Chinese rice was 9.99 pounds for 5 kg, but now it sells at 14.99 pounds. The price of Japanese rice has increased more than Chinese rice. We also have a delivery service and because of the surging petrol prices, we have had to increase our minimum order from 20 to 30 pounds," she said.

"There are many customers who come to us and say 'oh the price is too high'. At least we still provide a discount for students, but we had nothing else to do."