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Chapter 1-5
Chapter 1-5
Einführung
Inflation is the rate of increase in prices over a given period of time. Inflation
is often measured in broad terms, such as the general rise in prices or the rise in a
nation's cost of living. (Oner, 2022). Due to the increase in prices of goods and
services many are affected including business here in the Philippines. Businesses in
The Philippines baking industry is in great need of skilled bakers. The demand
for bread and other baked items is increasing as more people eat out. The Filipino
population enjoys indulging in baked foods including bread, cakes, pastries, and other
sweets. (Manalo, 2022) But because of inflation, baked goods is increased in price
because of the increase of prices of its ingredients. Bakeries in the Philippines also
reduce the number of employees because of inflation. Many bakeries was forced to
Inflation in the Philippines hit 6.1 percent in June, the highest level in nearly
four years, as steep fuel price hikes push up food and transport cost. Lawmaker and
Economist Joel Salceda said bread would he the hardest hit by "shrinkflation" where
the size of a product gets smaller but the price stays the same.
Catanduanes will help them to understand why their business change as a result of
inflation.
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The primary goal of this study is to determine the different changes on bakery
Conceptual Framework
Output
Input Process
Changes in
Bakery Interview price, production
and sales
FIGURE 1
Figure 1 presents the conceptual framework of the study. The variable in input
2. What are the changes of bakery business to overcome the issue of inflation?
4. How does inflation affects the sale of baked goods of the business?
2
5. How does inflation affects the sales of the business?
this study is to know what are effects of inflation to the bakery business, the changes
to overcome the issue of inflation and how inflation affects the price, production and
sales of the business. The researcher will use interview as research instrument.
The study does not cover the total number of bakery business in Virac,
Catanduanes. The selection of a respondents are only limited since there is a lot of
bakery owners in Virac, Catanduanes. This research is designed to find out what
happen to their business due to the inflation. Also this research can help them to
Inflation is the rate increases in prices a given period of time. The result of
this study will provide essential knowledge and merit the following:
Owners
The result of this study will help the bakery business owner to see the effects
Consumers
The result of this study may provide some knowledge on how products pricing
changes due to inflation, allowing consumers to better plan ahead on their spending
and budgeting
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Other bakery business
Bakery business related to the selling of breads, cakes and other pastries may
realize more about the movement of consumer demand based on the price changes
Future Researcher
This study will help other researcher to find more effects of inflation on
bakery business. It will give them ideas and inspiration to conduct more intensive
Definition of Terms
Bakery
A place where you can bake and sell bread and cakes
Inflation
Production
Sale
The term sales refer to the activities that lead of the sale of goods.
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CHAPTER II
Inflation is having a direct impact on food security. Food security was already
at crisis levels due to factors such as conflict and climate change, and rising inflation
is worsening the situation Since they spend a large amount of their income on food,
low-income earners are the ones who are most affected by food inflation. Many
people fall into poverty as a result of rising food prices making it unaffordable and
inaccessible to others who are already suffering. And with food inflation comes other
challenges, namely food fraud. Most of the time, food fraud has food safety
Since the outbreak, costs for transportation, packaging, and raw materials
have increased, and the global food crisis sparked by Russia's invasion of Ukraine is
further extending these rising expenses. Larger businesses like Starbucks or Dunkin’
Donuts have their own in-house Finance and Data teams that can help them calculate
financial risks to stay afloat in hard times. These resources could be hard to find for a
small business or might not even be considered required because of their scal
(Buarque, 2021).
based bakery, San Pedro Sourdough, every day. In addition to fulfilling special
orders, McLaughlin sells to the neighborhood corner store and gives to a number of
pop-ups and even neighborhood food pantries. Since this past summer, according to
McLaughlin, the cost of her locally milled flour has never been greater. As a result,
McLaughlin had to alter her baking company, as did the majority of neighborhood
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bakeries. She has reduced her marketing efforts. She use cheaper bags, she didn’t put
little cards in the bags anymore and stamp the bags less. Like most bakers in today's
market, she too had to increase prices. Wheat inflation, according to McLaughlin, is
forcing her and other bakers to alter their methods of operation, but she doesn't
believe it will ultimately put a stop to their businesses. She claimed that even with
increasing costs, there is still a strong enough demand from her clients for her to
While several bakeries in the Philippines are shrinking the size of a popular
breakfast bun in order to make ends meet in the face of higher inflation as a result of
the increased cost of imported edible oil and the effect that the situation in Ukraine
has had on wheat prices. The pillowy soft "pandesal," which Filipinos typically soak
in coffee or load with cheese, used to weigh 35 grams at Matimyas Bakery, a bread
producer in the suburbs of Manila. Now the size of the roll which is known as the
"poor man's bread" due to its low price, has gradually reduced the size to
approximately 25 grams in order to prevent the price from rising by 2.50 peso
(roughly $0.04), as the cost of both locally produced and imported ingredients has
increased over the past few months. Because it operates on a daily basis, the bakery
cannot afford to buy extra ingredients in anticipation of price drops due to changes in
detriment of ordinary consumers—first it was rice, followed by fuel, and lately sugar.
In the next few weeks, the price of the ordinary tasty bread and “pandesal” may have
to go up as well. The cost of regular tasty bread and "pandesal" may need to increase
6
over the next weeks as well. The largest bakers in the nation declared they would ask
the Department of Trade and Industry (DTI) for a P4 rise in the price of bread this
week or the following to help them recover the higher costs of ingredients. Currently,
the prices for Filipino Tasty and Pinoy Pandesal are P38.50 for a 450-gram pack and
(PhilBaking) president said that they are affected that’s why they need to file for an
Big bakers will start implementing higher prices on Pinoy Tasty and Pinoy
Pandesal after the Department of Trade Industry announced price adjustments in the
suggested retail price (SRP) on basic necessities and prime commodities (BNPCs).
President of the Philippine Baking Industry Group (PhilBaking), said the 450-gram
Pinoy Tasty will have a new price tag of P40.50 with P2 price hike per loaf and the
ten-piece pack Pinoy Pandesal at P38.50 with P1.50 increase . Due to a number of
causes, including the disruption of the supply chain brought on by the Russian
invasion of Ukraine and the depreciation of the peso, the price of flour increased.
The rule of thumb is that for every P40 increase in flour prices is a corresponding P1
Behaviour and requirements of customers have changed over the years, and
purchase bread, pastries and other bakery products. Currently, consumers have high
standards for the quality of advertised foods, the variety of products, and their
7
In the study of Kubocova & Predanocyova (2018), based on the findings, it
can be concluded that bread and normal pastries, which are typically bought many
times a week, are the bakery products that Slovak consumers most frequently
purchase. The survey's findings also demonstrate that Slovak consumers care about
the cost of bakery goods, but the majority of them base their decisions on previous
Bakery is one of the primary sources of income from the entrepreneurs that
serves various products and directly sells to the customers. Quality service and the
product are part of the business that conceptualize the customers' perceived
expectations. However, the COVID–19 pandemic has brought the worst impact to the
effect on the global bakery industry is an increase in the price of baked goods as a
result of retailer limits that reduce suppliers' sales and transportation delays that
impair their services. Additionally, some business owners offered strategies for
business aspects, entrepreneur traits, and competitive advantage tactics that contribute
to the success of online bakery firms. The success of the business was unaffected by
8
consistency, seeking for learning, and aiming for success. Entrepreneurs with self-
confidence, innovation skills, risk-taking, a desire to learn and succeed as well as cost
strategies such as differentiation strategy, cost leadership strategy, and focus strategy
had an impact on business success. The findings of this study can serve as a roadmap
for developing entrepreneurs and the tactics for competitive advantage that will affect
In the study of Samonte et. al (2022), it explored and described the business
strategies of food service industries in Cabanatuan City in the New Normal. Most of
the respondents were impacted by the pandemic in terms of the five indicators used in
the study. The finance and cash flows were greatly impacted due to a profit decline.
employee size due to a loss in sales and profits. Similar to that, they used local
Lastly, Gagita et. al (2022), the COVID-19 Pandemic has altered the living of
almost all Filipinos. For the years that people have been affected by the pandemic,
everyone must adapt to the new normal to survive. The findings demonstrated how
difficult it is for home bakers to compete with their growing number of rivals and the
rising cost of cake materials while yet managing to maintain regular sales. In
addition, the study's findings show that sellers consistently provide high-quality
services and goods in order to please their clients, follow a trend, and learn more
9
about how to continue operating their businesses. Since social media is the primary
Inflation is having a direct impact on food security. Many people fall into
others who are already suffering. And with food inflation comes other challenges,
namely food fraud. Most of the time, food fraud has food safety implications and can
Since the outbreak, costs for transportation, packaging, and raw materials
have increased, and the global food crisis sparked by Russia's invasion of Ukraine is
further extending these rising expenses. Larger businesses like Starbucks or Dunkin’
Donuts have their own in-house Finance and Data teams that can help them calculate
financial risks to stay afloat in hard times (Buarque, 2021). While several bakeries in
the Philippines are shrinking the size of a popular breakfast bun in order to make ends
meet in the face of higher inflation as a result of the increased cost of imported edible
oil and the effect that the situation in Ukraine has had on wheat prices. (Anon, 2022)
based bakery, San Pedro Sourdough, every day. Since this past summer, according to
McLaughlin, the cost of her locally milled flour has never been greater. As a result,
McLaughlin had to alter her baking company, as did the majority of neighborhood
bakeries. She has reduced her marketing efforts. Wheat inflation, according to
McLaughlin, is forcing her and other bakers to alter their methods of operation, but
10
she doesn't believe it will ultimately put a stop to their businesses (Basha, 2022).
Gagita et. al (2022), the COVID-19 Pandemic has altered the living of almost all
Filipinos. demonstrated how difficult it is for home bakers to compete with their
growing number of rivals and the rising cost of cake materials while yet managing to
maintain regular sales. In addition, the study's findings show that sellers consistently
provide high-quality services and goods in order to please their clients, follow a trend,
and learn more about how to continue operating their businesses. Since social media
things there. Also according to Virginio et. al (2022), the COVID-19 pandemic's
primary effect on the global bakery industry is an increase in the price of baked goods
as a result of retailer limits that reduce suppliers' sales and transportation delays that
impair their services. Additionally, some business owners offered strategies for
by fuel, and lately sugar. The largest bakers in the nation declared they would ask the
Department of Trade and Industry (DTI) for a P4 rise in the price of bread this week
or the following to help them recover the higher costs of ingredients (Monzon, 2022).
findings, it can be concluded that bread and normal pastries, which are typically
bought many times a week, are the bakery products that Slovak consumers most
frequently purchase.
11
Big bakers will start implementing higher prices on Pinoy Tasty and Pinoy
Pandesal after the Department of Trade Industry announced price adjustments in the
suggested retail price (SRP) on basic necessities and prime commodities (BNPCs).
Due to a number of causes, including the disruption of the supply chain brought on by
the Russian invasion of Ukraine and the depreciation of the peso, the price of flour
increased. The rule of thumb is that for every P40 increase in flour prices is a
advantage tactics that contribute to the success of online bakery firms. The success of
the business was unaffected by the business considerations. Business success was
risk-taking, management, consistency, seeking for learning, and aiming for success.
In the study of Samonte et. al (2022), it explored and described the business strategies
of food service industries in Cabanatuan City in the New Normal. The shortage of
products needed by the customers. Likewise, they reduced the employee size due to a
loss in sales and profits. Similar to that, they used local resources to innovate their
skilled individuals and to connect with people by sharing the creative and delicious
pastries. The demand for bread and other baked items is increasing as more people eat
out. Population and income growth are expected to result in greater demand for a
12
variety of commercial and retail specialty baked goods, including cupcakes, pies, and
cakes. But because of inflation, some bakery businesses are forced to change their
marketing strategies. Some are reducing the grams of their buns, or they are forced to
Virac, Catanduanes.
All studies have been made for the researcher to have an idea
regarding to the effects of inflation on bakery business from the contents of related
literature and studies. There where no general studies on the compliance of the
effects of inflation on bakery business in Virac, Catanduanes but many studies have
research topics state the consumers care about the cost of baked goods, entrepreneurs
has tactics to success in bakery firms, business owners have strategies in order to
maintain in bakery industry and sellers consistently provide high-quality services and
goods in order to please their clients. Some studies has been conducted but not
specifically in Virac, Catanduanes. This gap of the study is to identify what are the
effects of inlflation on bakery business and how business owners react on this.
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Chapter III
Research Design
Qualitative Descriptive research design will be used in this study. This study
will deal with the effects on inflation o bakery business in Virac, Catanduanes. The
meaning of the data that will be collected will be described from objective point of
view.
Research Subject
The research subject and respondent of this research are the owners of
selection.
Research Environment
more than 10 bakery who sell baked goods, like breads, cakes, and other pastries.
The study will be conducted in Rawis, Dugui Too and Sto. Domingo, Virac,
Catanduanes.
Research Instrument
The researchers will use interview as a tool of gathering data. In lexical term,
wherein the former will ask series of questions. In conducting the interviews, the
researchers will be writing down notes of the answers of the respondents. The
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researchers will also use devices such as audio recorder, video recorder, and camera
The researcher will use interview guided by research topic and questions. The
information that will be gather will be treated with utmost confidentiality and will
Data Analysis
The data analysis of this study will be consisting of words, pictures, symbols and
interpretation. The data that will be collected by researcher will be used in data
analysis. The researcher will be using narrative analysis to revise the primary
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CHAPTER IV
ANALYSIS OF DATA
This chapter presented the data collection, analysis and results for this study.
Based on the table, the age of the respondents is between 26-45 years old.
There are 2 female, and 1 male respondents. The respondents highest educational
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necessary. For in flour sometimes in flour sometimes because of the
example, in flour increases, increases, increase in the
sometimes sometimes sometimes prices of raw
increases, decreases, sugar, decreases, sugar, materials and if
sometimes margarine margarine you have
decreases, sugar, especially when especially when employees
margarine there are more there are more
especially when staff. staff.
there are more
staff.”
Respondent 2: Life is hard, Life is hard, Effects:
“Life is hard, because the price because the price Life is hard now
because the price of goods increase of goods increase because of inflation
of goods increase.”
Respondent 3: every aspect of a every aspect of a Effects:
“ When inflation business becomes business becomes Every aspect of a
rises every aspect more expensive more expensive business becomes
of a business more expensive
becomes more because of inflation
expensive”
Describe how Themes search Review the themes Define the themes
inflation affects and formed
your bakery
business?
Respondent 1: the sizes of our The sizes of our The sizes of their
“For example, the bread are different bread are different breads are
sizes of our bread different. There is
are different. Some Some have fillings, There is also also different types
have fillings, so the so the sizes and different types of of breads so the
sizes and prices are prices are also breads so the sizes sizes and prices of
also different.” different and prices of our the bread are
bread are different different.
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increase, we will be we will be forced prices of goods also increase. Also
forced to increase to increase the also increase they will reduce the
the price. We will price weight of the
reduce the weight Reduce the weight products.
of the products so We will reduce the of the products
that people can buy weight of the
more at the price products so that
they can afford.” people can buy
more at the price
they can afford.
Based on the table, the respondents think budgeting is necessary for them
because of the increase in the prices of raw materials and if you have employees.
Also according to them life is hard now because of inflation. And every aspect of a
business becomes more expensive because of inflation. Because of inflation the sizes
of their breads are different. There is also different types of breads so the sizes and
prices of the bread are different. Most income of the business goes to expenses. And
when the price is high, the business will be more expensive. If the price of raw
materials increase, the prices of breads also increase. Also they will reduce the weight
of the products.
SOP 2- What are the changes of bakery business to overcome the issue of
inflation?
What are the Themes search Review the themes Define the themes
changes in your and formed
bakery business to
overcome the
issue of inflation?
Respondent 1: We don't expect it Changes: Changes:
“We don't expect it to increase or don't expect it to They didn’t expect
to increase or decrease increase or that prices will
decrease, the only decrease increase or
problem is that for we will buy flour decrease
example, we will from a big Buy flour from
buy flour from a company and they other company, if They will buy flour
will increase, of they increase the from a big
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big company and course we will price, they will company and if
they will increase, increase as well increase also they increase the
of course we will price, they will also
increase as well.” increase
Respondent 2: We just make the Changes: Changes:
“We just make the bread smaller Make the bread They will make the
bread smaller and smaller bread smaller
then we also also reduce the
reduce the ingredients, instead Reduce the Also they will
ingredients, instead of a lot, we just ingredients reduce the
of a lot, we just reduce it. ingredients
reduce it.”.
Respondent 3: Sometimes reduce Changes: Changes:
“Sometimes reduce expenses. Reduce the They will reduce
expenses. The expenses their expenses and
products will also The products will products
be reduced in order also be reduced Also reduce the
to make it even product
better for the
buyers.”
As you can see on the table, they didn’t expect that prices will increase or
decrease. In order to overcome the issue of inflation, they will buy flour from a big
company and if they increase the price, they will also increase. Also they will make
the bread smaller and will reduce the ingredients. They will reduce their expenses and
products as well.
How does Themes search Review the themes Define the themes
inflation affects and formed
the production of
your business?
Respondent 1: In production you Need to budget They need to to
“In production you should really budget and look at
should really budget Look at the price of the price of raw
budget that if you raw materials materials.
keep going and step by step you
then you don't have have to look at the
production you will price of flour,
really lose money, margarine, sugar
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in production step everything you
by step you have to have to check
look at the price of
flour, margarine,
sugar everything
you have to check.”
Respondent 2: The bread is Bread is reduced Bread is reduced.
“The bread is reduced.
reduced.”
Respondent 3: the effect is quite there is less to do Their production
“The effect is quite big, because there now is lesser
big, because there is less to do there is little because of
is less to do. money left from inflation and
Because there is there is little money selling at the decrease in sales.
little money left left from selling at bakery
from selling at the the bakery
bakery.”
According to the table, the effects of inflation to the production of the business is that
they need to to budget and look at the price of raw materials and reduced the number
of breads. Also the production now is lesser because of inflation and decrease in
sales.
Table 5- The effects of inflation on the prices of baked goods of the business
SOP 4- How does inflation affects the prices of baked goods of the business?
How does Themes search Review the themes Define the themes
inflation affects and formed
the prices of your
baked goods on
your business?
Respondent 1: you must also follow the previous they must follow
“The bread prices, follow your bread prices, the previous bread
for example, you previous bread cannot increase too prices and cannot
will increase now prices, you cannot much increase too much.
and then at the increase too much.
other bakery, they
have not changed
the price, you must
also follow your
previous bread
prices, you cannot
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increase too
much.”
Respondent 2: reduced the product reduced the product Instead of
“We reduced the instead of instead of increasing the
product instead of increasing the price increasing the price price, they will
increasing the reduced the
price.” product.
Respondent 3: The price is simply The price is simply The price can be
“The price is reduced or reduced or reduced or
simply reduced or increased. increased. increase.
increased.”
The table shows, that the prices of their products can’t increase that much. So
How does Define the themes Review the Define the themes
inflation affects themes
the sales of your
business?
Respondent 1 First think about think about your Think about your
“First think about your sales sales sales and you will
your sales, for know everything
example, whether it you will know you will know from the beginning
increases or everything from the everything from the if it decrease or
decreases, so it is beginning beginning increase.
necessary that if
you do business
with a bakery, you
will know
everything from the
beginning”
Respondent 2 Before there were a Before there were a Before there were a
“Before there were lot of sales, it's lot of sales, it’s lot of sales, it’s
a lot of sales, it's okay but of course okay. okay. But now that
okay but of course the majority of the there are increase
the majority of the impact is the instead of the in prices, instead of
impact is the products, income going to us, the income to them,
products, instead of it goes to the it goes to the
the income going to instead of the expenses expenses.
us, it goes to the income going to us,
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expenses, because it goes to the
with the product expenses
before, it just goes
to the expenses.”
Respondent 3: investment does investment does The sales of the
“The investment not return because not return because bakery is decreased
does not return it is reduced by it is reduced by because the
because it is expensive goods. expensive goods investment did not
reduced by return.
expensive goods.”
This table tells, that knowing everything about the sales from the beginning,
you will know if it decrease or increase. According to the respondents, the effects of
inflation on the sales of the business are before there were a lot of sales, and it’s
okay. But now that there are increase in prices, instead of the income to them, it goes
to the expenses. Also the sales of the bakery is decreased because the investment did
not return.
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Chapter V
This chapter includes the summary of findings that the researchers have
analyzed, documented conclusion and recommendation that will help on how bakery
Summary
This study was conducted to answer the following question: 1.) How inflation
affects in bakery business in Virac? 2.) What are the changes of bakery business to
overcome the issue of inflation? 3.) How does inflation affects the production of the
business? 4.) How does inflation affects the sale of baked goods of the business? 5.)
Virac, Catanduanes. The researchers identify the different effects on inflation on the
bakery business in Virac, Catanduanes such as changes in price, production and sales.
The research instrument used in the study was interview. The researcher asked
a series of questions after that the researchers write down the answer of the
respondents. The researchers used devises such as audio recording and camera in
and analyzing the data. This instrument help the researchers to obtain straight
description and to provide analysis and interpretation of the findings that remained
data.
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The findings of this study that inflation has a big effects on the bakery
business in Virac, Catanduanes. Most of them reduces the size of the bread in order to
overcome the inflation. The respondent says that they can’t increase the prices of the
bread because it is the standard in the market. The sales of their business decreased
because they reduced production and also because of the high prices of ingredients.
Fazit
The researcher had come up with their conclusion based from the gathered
1. The effects of inflation on bakery business in Virac, Catanduanes are some of the
bakery need to have a tight budget on the production of their goods. Some
or make the breads smaller and to increase the price of the other baked goods.
3. The effects of inflation to the production of the breads decreases because of the
4. The effects of inflation on the prices of baked goods of the business that the
prices of their products can’t increase that much. So instead of increasing the
5. The effects of inflation on the prices of baked goods is that before their sales are
good but now it’s no longer because they have to fit the sales to the continuation
Recommendation
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The researchers considered the following for the future researcher:
researcher should not focus on price, production and the sales only.
3. The researcher should know the goals of the bakery business in order to overcome
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