By Clement Chou
27th September 2023 – (Hong Kong) On a recent trip to my local Hong Kong supermarket, I noticed prices seemed higher across the board. Frozen dumplings usually on sale were now full price. Regular items appeared a dollar or two costlier. It coincided suspiciously with the government’s latest consumption voucher handout. Could this opportunistic timing be a coincidence?
Hong Kong offers wonderful grocery options – extravagant imported delicacies or everyday items cheaply at wet markets. But for convenience, we rely on major chains like ParknShop and Wellcome, whose dominance means they can hike prices freely.
Capitalising on vouchers to exploit working families seems despicable greed and not laissez-faire supply-demand economics. While restaurants charge holiday premiums, that cover indulgences, not basics like groceries. Supermarkets claim it’s just inflation, but their selectively timed price increases reveal the ugly side of unchecked capitalism.
Comparing costs, Hong Kong appears significantly pricier than Tokyo and Singapore. A check of Numbeo data, which tracks prices worldwide, reveals Hong Kong charges more for common items from bread to chicken, fruits, vegetables, and dairy products. Some staples like rice and cooking oil cost over 50% more in Hong Kong.
For example, a loaf of bread that is US$2.55 in Hong Kong costs only US$1.93 in Tokyo. A dozen eggs retailing for US$4.17 in Hong Kong sell for just US$3.04 in Tokyo and US$2.96 in Singapore. A kilogram of apples goes for US$2.78 in Hong Kong but only US$1.69 in Tokyo.
Price markups are despite Hong Kong’s currency peg to the strong U.S. dollar. Japan and Singapore’s currencies have weakened further against the greenback this year. Their groceries should become relatively more expensive due to pricier imported ingredients. Yet Hong Kong’s chains continue padding profits amid worsening economic conditions.
Unsurprisingly, the Consumer Council’s 2022 supermarket survey found a 2.1% price rise versus 2021 – the steepest since 2013. Nearly 70% of surveyed goods jumped in cost, especially butter, tea, cheese, oils, and canned products. Some canned items soared 30% over the pandemic due to hoarding.
But rather than stabilising prices for recovery, chains are squeezing citizens already pressured by rising electricity costs and slipping living standards. ParknShop incredulously claims its prices rose less than the watchdog calculated, shifting blame to suppliers and logistics partners.
Such corporate irresponsibility may be expected in unchecked capitalism. But profiteering off basic necessities during hard times appears morally indefensible. Supermarkets are not luxuries – their role should be providing affordable staples, not just maximizing profits.
Critics may argue Hong Kongers can shop at wet markets if unhappy with supermarket prices. But in reality, the convenience chains offer makes them quasi-monopolies most now rely on. Their scale should require pricing staple foods responsibly, not spiking prices opportunistically.
Authorities may consider stronger oversight given grocers’ essential role, like price increase cooling-off periods around voucher issuances. Supermarkets may protest this restricts free markets, but they have breached the public trust. Singapore runs a price watchdog website allowing consumers to easily compare costs across retailers.
For lasting positive change, Hong Kong chains must adopt more ethical mindsets, not just masters like Walmart. Responsible pricing nurtures community bonds crucial for recovery, rather than mercenary motives eroding society’s fabric. Price gouging may be legal but not right. Hopefully, consumer and media pressure will make retailers rethink.
Hong Kongers expect better from businesses they support loyally. Local chains should remember their roots here before becoming heartless money machines. They cannot nickel and dime citizens during hard times and expect no outrage. If giants like ParknShop and Wellcome wish to demonstrate true corporate social responsibility, now is the time.
Hong Kong Prices Versus Asian Counterparts
Staple Goods More Expensive
Comparing Hong Kong prices against Tokyo and Singapore reveals significant markups for basic groceries. Despite currency depreciation making imports pricier for Japan and Singapore, Hong Kong chains appear to be maintaining wider profit margins. Some every day essentials are over 50% more expensive versus the regional cities.
For instance, white rice costs US$1.52 per kg in Hong Kong but only US$0.88 in Tokyo and US$0.75 in Singapore. Cooking oils like sunflower oil retail for US$2.60 per litre in Hong Kong versus US$2.15 in Tokyo and US$1.53 in Singapore. Eggs are US$4.17 for a dozen in Hong Kong but US$3.04 in Tokyo and US$2.96 in Singapore.
Onions cost US$1.40 per kg in Hong Kong against US$0.85 in Tokyo and US$0.80 in Singapore. A loaf of bread is US$2.55 here but US$1.93 in Tokyo while two litres of milk is US$5.46 in Hong Kong and US$4.08 in Tokyo. Even local cheese is far pricier here at US$11.59 versus US$8.82 per kg in Tokyo.
Fruits and Vegetables Also Costlier
Fresh produce like fruits and vegetables are significantly above Tokyo and Singapore prices. Apples are US$2.78 per kg here but US$1.69 in Tokyo and US$2.13 in Singapore. Oranges cost US$2.57 per kg in Hong Kong, US$1.73 in Tokyo and US$1.53 in Singapore.
Potatoes are US$1.45 per kg here against US$0.85 in Tokyo and US$0.92 in Singapore. Lettuce is US$2.71 each in Hong Kong but way cheaper at US$1.82 per head in Tokyo. Tomatoes retail for US$1.95 per kg here versus just US$1.14 in Tokyo and US$1.06 in Singapore.
Dairy and Meat Also More Pricey
Dairy products like milk and cheese are noticeably pricier here than in the regional cities. Two litres of milk cost US$5.46 in Hong Kong but only US$4.08 in Tokyo and US$4.65 in Singapore. Cheese is a staggering US$11.59 per kg here versus US$8.82 in Tokyo and US$8.04 in Singapore.
Meats like chicken and beef also show steeper Hong Kong pricing. Chicken fillet is US$6.30 per kg here but US$4.70 in Tokyo and US$4.90 in Singapore. Round beef costs US$12.49 per kg here against US$9.26 in Tokyo and US$10.88 in Singapore.
In summary, Hong Kong’s major supermarkets charge significantly higher prices than counterparts in Tokyo and Singapore for many basic food items from staples to meats and vegetables. This persists despite currency depreciation overseas that should render imports more costly for Japan and Singapore versus Hong Kong’s pegged currency.
The data shows major chains are maintaining inflated margins even while Hong Kong’s economy struggles. They appear reluctant to share the pain with consumers by restraining profit growth. This explains the public sense of supermarket price gouging.
Poor justifications
Chains defend higher prices claiming logistics and imported food inflation justify markups. But restaurants also face the same cost issues without disproportionate increases. Chains also highlight promotions and rewards programs that help consumers.
But this ignores how prices for staples like rice, oils and bread that see regular consumption remain inflated. Even with targeted promotions on some items, overall household food bills inevitably rise. An ethical business mindset requires balancing corporate profits with community well-being during tough times.
Sadly most Hong Kong supermarket chains now appear to prioritise maximizing margins over responsible pricing that shares customers’ economic burden. This breeds resentment given grocers’ vital role.
Price markups during voucher schemes were a brazen example of chains acting ruthlessly to capitalize on consumers’ vulnerability. With households under financial stress, such opportunism seems unethical. This damages community trust in businesses citizens support loyally.
The remedy
To help address the problem, Hong Kong authorities could consider stronger oversight through pricing regulations on staple foods. Additional transparency measures like mandatory price justifications when markups exceed inflation may be worthwhile. Clearly, voluntary corporate social responsibility has limitations when profits overwhelm ethics.
But the onus remains on chains to do right by Hong Kong. Hopefully, public and media pressure will force introspection on whether unrestrained profit-chasing at citizens’ expense represents responsible business worthy of this community’s trust. If supermarket leaders hope to regain public goodwill, they must rethink what ethical retailing means during these harsh times.
