Some residents have criticized officials for not strictly monitoring the market for what they believe are unjustified price increases. The Ministry of Commerce and local officials are pointing the finger at each other for who is responsible for such monitoring, according to the report.
For their part, business owners say these price increases are necessary because of the rise in the cost of doing business.
Sameh Jalal, an accounts manager of an unnamed but well-known restaurant, blamed the rise in commercial rents.
“There was a 20-percent increase in building rent last year alone,” he told the paper. “The rent shot up from SR25,000 to SR30,000 in a year,” he said.
Naif Al-Rajhi, chairman of the Hospitality and Restaurants Committee at the Jeddah Chamber of Commerce and Industry, justified the increase in the prices of meals by local restaurants.
“It is the right of restaurants to increase rates of meals in the wake of a hike in rents and hiring more workers to serve customers,” he said. “The new trend of facilitating more space for cafe customers has also contributed substantially in raising their cost of operation.”
Commenting on the issue, Muhammad Omaish, owner of Al-Sultan Real Estate Office, said that increase in rent is not the only reason for the recent rise in prices of meals.
“There has been an increase in the rents of all types of real estate, such as residential apartments, commercial shops and office spaces,” he said. “But unlike commercial shops, it is possible for restaurants to increase charges of meals to compensate a hike in their rents. Most restaurants make a hike higher than that of the actual increase in rents.”
Meanwhile, Khaled Qamqamji, director of the branch of the Ministry of Commerce in Madinah province, said the duty of monitoring local markets for price gouging is the responsibility of municipal officials.
But an official of the Jeddah municipality, speaking on condition of anonymity, said the prices of the cost of products the restaurants use should be monitored at the ministerial level.
“Prices of meals at restaurants also depend on market conditions such as the rules of supply and demand and the presence of competition in the marketplace,” he added.
