Why is the cost of cooked food resistant to inflation reduction?

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The Cost of Cooked Food Remains Resilient to Inflation Reduction Due to Deep-Rooted Eating Out Habits

The cost of cooked food has proven resistant to broader inflation reduction efforts primarily because it represents the most elastic component of household expenditure, making it difficult to reduce. This phenomenon is intrinsically linked to a long-standing cultural shift towards eating out, which has steadily increased its proportion of monthly income over the years.
Sustained Growth in Expenditure on Dining Out

Household expenditure surveys conducted over the past two decades consistently indicate a growing trend in the allocation of income towards dining out. This includes spending on take-out meals, restaurants, and local food stalls. The data reveals a persistent increase in the proportion of household budgets dedicated to these external food options, underscoring its significant and growing role in the Malaysian economy and household spending patterns.
The Impact of Habitual Eating Out on Disposable Income

The ingrained habit of eating out contributes to a reduction in disposable income for many households. As a larger portion of monthly earnings is directed towards fulfilling this desire, individuals and families have less financial flexibility. This increased sensitivity to price fluctuations means that even when general inflation decreases, the cost of ready-to-eat meals remains a point of concern and a challenge for budget management.
Eating Out as a Core Component of Monthly Inflation

The culture of eating outside has become a primary driver of persistent inflation in the food sector, making it a key component of month-to-month inflation figures. Unlike other expenditure items that may see quicker adjustments, the demand for convenience and the established practice of purchasing cooked meals present a unique challenge. This makes the food component of inflation particularly stubborn and less responsive to overall economic adjustments.

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Why is the cost of cooked food resistant to inflation reduction?

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