New Survey Reveals Consumers in Malaysia Remain Price Conscious

According to the latest global online consumer confidence findings from Nielsen, 86% of Malaysian shoppers are aware of price increases, and 63% of hyper and supermarket shoppers indicated that they would only buy the essentials items or cut down luxuries as a response.

Nielsen’s annual Retail and Shopper Trends Report which identifies key trends and market shifts in the grocery sector also reveals that 32% of shoppers would buy less in total to counter price increases, representing the highest percentage in Southeast Asia along with Vietnam.

These two approaches have surpassed the proportion of those who actively look for and buy products on special/discounted prices (30%).

“The reaction from shoppers to economise isn’t a surprise and it has the potential to impact the growth rates for the total Fast Moving Consumer Goods (FMCG) market,” said Jake Shepherd, Retailer Services Director, Nielsen Malaysia. “Malaysian consumers are cautiously optimistic. There are concerns about the broader economic climate and local events, but they remain comfortable about their own personal finances. This comfort may not always translate into additional spending; they remain price sensitive and may look to cut back on luxuries or buy less in total if they feel their weekly food budget is stretched which could stifle industry growth. They are also more likely to spend their spare cash on paying off debt than spending compared to other Asia Pacific countries.”

Fast Moving Consumer Goods (FMCG) Volumes Decline in Q2 2012

Another factor for the robust Consumer Confidence not translating into additional spending could be the dynamics of retailer performance in Malaysia.

Nielsen’s survey also shows that whilst traditional grocery (8.6 times), wet markets (5.1 times) and vegetable vendors (4.4 times) are still the top three most frequently visited channels per month, their visit frequencies have declined over the last three years. Hypermarket visits remain relatively stable and their market share reflects this.

“One of the contributing factors of the volume decline could be the performance of the Hypermarkets,” said Shepherd. “Though 44% of shoppers still say these are the stores where they spend most money, the amount of times people visit them in a month is stable and has been for some time. This type of store is typically where shoppers are encouraged to buy additional volume of goods. If shoppers are not visiting more often, the overall volume of goods they buy may not increase.”

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