KUALA LUMPUR, Dec 4 — Malaysia’s Food and Beverage industry saw growth between July and September this year even as locals are slowly cutting back on dining out, finding the prices of restaurant and cafe food more expensive now than before the Covid-19 pandemic, Retail Group Malaysia (RGM) said in its November report.

In the retail industry report released today, the group reported the Cafe and Restaurant sector registered a year-on-year growth of 9.6 per cent in the third quarter of 2023 while take-away, kiosk and stall sales leapt by 19.5 per cent although sales growth was lower than the January-March period.

“During the last quarter of this year, the rising cost of living has led to many Malaysian consumers dine out less.

“Furthermore, the higher costs of food supplies and manpower lead to declining profit margins for food and beverage operators,” RGM said.

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Higher food prices and operation costs remain the biggest challenge and a weak ringgit during the third quarter of 2023 had led to higher costs for raw materials and food ingredients, members of the group said.

It noted that the fourth quarter growth projections for the industry are much lower.

Malaysian retailers also said the effect of the boycott of several international F&B franchises over claims they are linked to Israel triggered by the Zionist government’s bombardment of Palestinian settlements in the Gaza Strip and the occupied West Bank.

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“Many Malaysian consumers avoid stepping into these restaurants and cafes. This prolonged boycott has affected these F&B businesses, the livelihood of its workers as well as the incomes of food delivery riders,” RGM said.

Franchises in Malaysia are a hundred per cent owned by companies that contribute nothing to Israel's military spending.

Studies on similar boycotts in the past show the act often has little impact on the targeted nation's economy.

Only coordinated sanctions by states have yielded some effect, such as the West's embargo on Russia as a response to its invasion of Ukraine.

Still, the sanctions have failed to force Russia to withdraw.