Supply chain issues make post-pandemic recovery more difficult for Asian-owned small businesses in Chinatown

Los Angeles residents celebrated the
Mid-Autumn Festival in Chinatown on Sept. 15, 2019.

A shortened staff and a soaring food bill has been a primary concern for Wenbin Feng, the third generation owner of Golden Lake Eatery in Chinatown. The restaurant, which has served Cambodian and Chinese dishes since the 1990s, has had operating costs rise higher than ever before.

With customers already scarce because of pandemic-related restrictions, he could not afford to double the price tag on his dishes. This meant that while the volume of orders was reduced, his profit per order also shrank severely.

“Prices have more than tripled,” Feng explained. “A carton of green onions used to cost me around $10, but now it’s up to over $30, and a barrel of cooking oil which used to cost $12 is now over $40.”

The global food prices rose by 33% in September 2021, compared to last year, according to the UN Food and Agriculture Organisation (FAO)’s monthly Food Price Index. The price index for edible oil crops (such as soybeans, peanuts and sunflower seeds) has increased significantly since March 2020, driven mainly by a 16.9% spike in vegetable oil prices from 2019 to 2020.

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While the drivers of the soaring food prices are complex and variable, what is certain is that damaged supply chains and pandemic-related disruptions have had a significant impact, especially on small businesses.

“The needed resources and raw materials were stuck in the port of Los Angeles for months,” said Jon Lin, the community economic development manager from Chinatown Service Center.

The Chinatown Service Center provides small business owners with training and consultation in a variety of Chinese dialects, as well as Vietnamese and Spanish. Lin said an unprecedented backlog made it more difficult for small businesses in Chinatown to recover from total losses after the pandemic, as many are still struggling.

The rising volume of orders and the shortage of labor have caused congestion to accumulate in the port day after day as ships wait to dock. “Imagine a congested highway at rush hour, with traffic moving slowly but still being joined by new vehicles,” said Shi Wang, a graduate global supply chain management student.

Lin said the long wait for goods to arrive and the rapidly-rising prices has left small businesses in Chinatown undersupplied.

This image is a stark difference to the Mid-Autumn Festival in 2019, where Chinatown was jam-packed with locals, native Chinese people and tourists united in the city. Visitors had to wait in long lines to get a taste of authentic Chinese cuisine.

Two years after the onset of the pandemic, Chinatown’s prosperity has severely diminished. The once-crowded streets are now sparsely populated, with “Closed” written on the front doors of restaurants that once saw abundant sales and customers.

Even though people have gradually returned to normal life under the protection of COVID-19 vaccines, the economic impact of the pandemic has left a deeper wound on this historic Asian community in L.A., which has experienced a much longer and more severe economic downturn.

Changing consumer habits have left tables in restaurants, which were once heavily patronized, empty. Customers no longer prefer to eat in restaurants with the current outdoor dining policy. “The six tables in my restaurant used to be always full before the pandemic,” Feng said. “Now, there are maybe only two or three occupied.”

The majority of Feng’s revenue source consists of takeaway orders, but even these profits keep shrinking. Most delivery and takeaway platforms charge the restaurant a 30% commission. He has no choice.

“If the customer comes and orders directly, I sell 1000 for 1000, but on the takeaway platform I sell 1000 for 700,” Feng said of his dwindling net profit.

Feng’s experience is a snapshot of one of thousands of Asian small business owners. As a result of the pandemic, by April 2021, a large percentage of Asian American-owned businesses in Southern California had experienced financial losses, closures and layoffs. Many of these businesses had difficulty obtaining local, state or federal assistance, according to a study published by the UCLA Asian American Studies Center.

The study also suggested policymakers streamline the process for business owners to apply for financial relief and work with community organizations to provide additional technical assistance to business owners.

For Feng, he hopes to improve his restaurant’s revenue by learning more about marketing techniques and potentially advertising to the USC student population.

You can check out Golden Lake Eatery’s menu here.