Coronavirus: China’s consumers push back against price increases as firms seek to offset Covid-19 impact
- Restaurant chains Haidilao and Xibei were forced to reverse price increases after a backlash from customers
- China’s headline inflation dropped for the second month in a row in March after posting an eight-year high in January
Chinese hotpot restaurant chain Haidilao found out the hard way that Chinese consumers, buffeted by weeks of lockdowns and travels restrictions as well as rising worries about their jobs and incomes, are in no mood to see the price of food and other daily necessities increase.
A few days ago, buckling under pressure after diners flooded China’s version of Twitter with threats to boycott the company, Haidilao issued an apology and restored prices to pre-closure levels. It also offered discounts of up to 31 per cent on takeaway orders.
Analysts say Haidilao’s experience points to one side-effect of the coronavirus outbreak: high downward pressure on prices that is likely to continue for some time.
Haidilao said it initially raised prices to accommodate increased costs for ingredients and labour, and to also compensate for fewer customers because it had to cut the number of tables available in response to social distancing requirements.