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Some Asian food retailers in Auckland's CBD have embarked on a price war, slashing prices by up to a third and offering cheap meal combos as wallets of many New Zealanders are hit by spiralling costs.
People opting to have their meals out are switching to cheaper
options, and businesses are fighting for patronage from customers who are becoming increasingly more budget conscious.
On Lorne St, Mei Long Zhen Shanghai Takeaway has signs put up showing prices of its Chinese steamed bun down from $1.50 to $1. On Wellesley St, Sushi-Ya, a Japanese sushi bar, started selling soup noodles from $2.50 and QQ Rice is offering a Taiwanese rice ball and beverage meal combo for $5.90 for orders before 11am.
The Weekend Herald reported last week that restaurants faced a significant drop in business, some up to 50 per cent, in the face of the economic downturn and increasing food and petrol costs.
"We cannot raise our prices, and although food costs have gone up, we still have to offer cheap or discounted food because people have less money in their pockets," said Jerry Weng, 20, of Mei Long Zhen, which sells Chinese dishes on rice meals from $5.
"But even at our cheap prices, business is still not as good as before."
A few stalls away from Mr Weng's shop is a Korean pancake bar _ Corner Pancake _ which sells freshly made pancakes with a selection of meat or vegetable fillings for between $2 and $3.
Owner Myoung Keun Kye, 54, says he has seen a lot more "different faces" in recent weeks because more central city workers have been choosing pancakes rather than going for lunch to cafes and foodcourts, where a meal would set them back about $10.
"We sell about 300 to 400 pancakes every day, and many customers say it is because they are cheap and good," he said.
Pancake customer Rita Ryan, 27, a retail sales consultant, said increasing costs had changed what she has for lunch.
"No more paninis; it's just cheap pancakes or simple sandwiches for us now," she said. "Instead of checking out new cafes and coffee shops, my friends and I spend our time scouting for places where we can have meals for under $5."
Dave Lim, a product manager at Tower Insurance, who lunches out on most days, said the increasing competition was good news for consumers.
"I am not complaining, because I get more choices with my lunch money now."
Accountant David Han, a former adviser with the NZ Federation of Budgeting Services, says more New Zealanders are struggling to make ends meet _ and dining out has become a luxury many are choosing to do away with.
"With the current high interest rates and food and petrol prices, many people no longer have much left in their wallets to spend having meals out. People are choosing to eat at home and pack their own lunches to work, so food retailers are fighting for business from a shrinking number of customers."
However, Mr Han said cutting prices "would not work in the long run" and he suggested that rather than offer discounts, food retailers should add value to their orders, such as offering complimentary tea or dessert.
"The increasing food cost means it would be impossible for anyone to cut prices, maintain quality and still make a profit."
