Small decisions, broad impacts
By Dan Nakaso, John Duchemin and David Butts
Advertiser Staff Writers
Hee Hing has tried to adjust to recent economic realities by offering cheaper menu items — focusing on noodles, pasta and less expensive cuts of meat — which means it's also buying fewer high-margin supplies from wholesalers as it opts for lower-cost goods.
Advertiser library photo • 2001
It is this type of decision — made by thousands of businesses and residents across the Islands every day — that has a ripple effect of constriction across the state's economy.
Stanley’s Chicken Market workers grill their product in the parking lot near the Farmer’s Market on Auahi Street.
Lee, who buys 8,000 chickens from the Kinoshitas each year, said he won't buy birds from anyone else, even if the economy is poor. But other restaurants, also cutting corners, sometimes have opted to buy frozen mainland chickens, which can be up to 25 percent cheaper than fresh local ones.
As a result, Dennis Jr. saw his sales of chickens to restaurants drop 15 percent. His take-home income for the year was only about $20,000.
Going into 2003, Kinoshita faces another classic business decision: Either wait for your customers to come back to you, or go out and get more.
Next year, the state's visitor arrival forecast calls for a recovery, rising about 6 percent, with spending projected to increase 7 percent — so restaurants such as Hee Hing see a brighter future for 2003.
But Dennis Jr. isn't sure businesses are confident enough to actually increase their orders without some prodding.
And he's also worried that a war with Iraq could cause a drop in tourism similar to that with the Persian Gulf War in 1991 — when visitor arrivals to the Islands dropped 3 percent on the year — and therefore discourage his customers.
"A lot of people buy more when they have good news, and buy less when there is bad news," he said. "A lot of it has to do with how people feel."
So Dennis Jr. plans to spend much more time making sales calls next year. And to stimulate business, Kinoshita plans to pitch high-end restaurants to list Stanley's chickens on their menus — a strategy that has paid off for other agricultural suppliers, who have convinced restaurants that marketing local products helps increase sales.
If the move pays off, Kinoshita thinks he can increase wholesale revenues by about 20 percent, or $60,000.
The additional money could prove crucial for Stanley's, which like other businesses in the state faces rising costs in 2003.
Overall, inflation is expected to be moderately low — between 1.5 percent and 2 percent — but certain types of rising expenses could make life more difficult for some businesses.
For the Kinoshitas, the main concern is a new 3-year lease at the Farmers Market, which rises 6 percent per year.
Next: Rising costs affect supplier, customer
