For businesses in Manhattan's Chinatown, inflation is a tough economic hurdle
Inside Grand Tea and Imports, a cultural store in Manhattan's Chinatown, there are glittering floor-to-ceiling shelves of tea, incense and goods for Buddhist holidays — such as paper shoes left at ancestors' tombs during the annual grave-sweeping festival.
"We usually sell this at $3.99. It's increased a little to $6 now," says Alice Liu, a second-generation owner of Grand Tea and Imports.
Though inflation is touching every part of the economy, it has created a particularly difficult puzzle for businesses in Chinatown.
Many of them rely on selling a lot, at a low price, to make a profit. But buying and shipping inventory costs much more now, so stores like Grand Tea and Imports have had to raise prices.
"You can't rely on the old model anymore," says Alice Liu.
The store has had to put up a sign by the register telling customers it can't offer discounts or negotiate on prices anymore, because the cost of doing business is just too high.
Part of the challenge for the neighborhood's businesses is that many of them source their products from Asia. COVID-19 lockdowns and closed ports there are limiting supplies and delaying shipments, which increases prices.
Liu says she's found creative ways to obtain inventory, such as asking her sister, Karen, to bring suitcases of tea and incense from Hong Kong when she visits.
"It's just more reliable, because you know when Karen will come and when she'll arrive. Whereas like with the mail, we mailed a bunch of tea from China a month and a half ago, and we're still waiting for it."
Liu says what's especially frustrating is that supply is so hard to get, just as demand has finally started to return.
At Golden Diner, a restaurant in Chinatown, owner Sam Yoo says he's had to raise prices too. From canola oil to limes, almost every ingredient is more expensive. He used to be able to keep prices lower by working with neighborhood suppliers instead of big distributors. But those suppliers have limited inventory now, so their prices went up.
"Those competitive advantages don't exist anymore because they need to make their ends meet," Yoo says.
Even though businesses in Chinatown are navigating an international economic puzzle, many still feel guilty about raising prices.
"Chinatown's median income is about $34,000. So these price increases make a difference," says Vic Lee, co-founder of Welcome to Chinatown, a community nonprofit organization.
Businesses owners know residents rely on products to be affordable. But Lee says inflation on goods isn't the only thing putting pressure on prices. Rents and labor costs are going up too. The rise of anti-Asian hate has made businesses limit their operating hours — and their revenue — because employees are scared for their safety at night.
"How much more can these businesses sustain? Because the community is extremely resilient and these business owners have put so much grit into it, but there are times where it feels like the odds are stacked against them," says Lee.
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