Most households here are able to absorb higher food costs, according to global survey on the impact of inflation on spending
Today Online, 8 Oct 13;
SINGAPORE — About seven in 10 consumers in Singapore are relatively unconcerned by looming food inflation as most say they have enough flexibility in their household budget to absorb a price rise, without having to make major spending cuts elsewhere, according to a report by Nielsen released today (Oct 8) .
Those who would adjust their household budgets in response to higher good costs indicated that they would watch out for sales, stock up on regular items and buy in bulk.
According to the Nielsen’s Global Survey of Inflation Impact, 69 per cent of Singaporean respondents said that they were unlikely to make significant spending cuts to cope with rising food prices, well above the global average of 50 per cent.
The majority of respondents in other South-east Asian nations covered in the survey also said they higher food costs would not force them to make major spending cuts elsewhere — the figure was 78 per cent in Thailand, followed by Indonesia (70 per cent), Vietnam (70 per cent), Malaysia (66 per cent) and the Philippines (58 per cent).
Of the Singaporeans queried in the survey who said that they would rethink their household budget, 72 per cent said that they would look to adjust their outlay on out-of-home dining, followed by new clothes and accessories (59 per cent), snack foods (49 per cent) and recreation and entertainment (45 per cent).
Consumers in the other South-east Asian countries also named those four areas they are most likely to cut back on as well.
Food categories most vulnerable during inflationary times include products such as candies, cookies and other sweets, chips and other snack foods, carbonated beverages and alcoholic beverages.
Meanwhile, staples such as meat, poultry, fish, seafood, fresh and frozen fruit and vegetables and dairy products appeared largely immune to consumer cutbacks in the face of rising food prices, Nielsen said.
“As income levels steadily increase throughout the region, many South-east Asian consumers appear to be taking the rising cost of living in their stride,” said Mr Matthew Krepsik, Executive Director of Nielsen’s Marketing Effectiveness Practice in South-east Asia, North Asia and Pacific.
“In order to appeal to a broad range of consumer classes it will be increasingly important for FMCG companies to understand the diversity of consumer demand across the region to accurately gauge purchasing power and the scale of goods and services required to meet the needs of consumers in both developed and developing South-east Asian markets.
“If consumers are required to make trade-offs to extend their food budget, they will shift to core staples, pay more attention to promotions and special offers and look to cut back their spending on non-essential, indulgent and processed foods.”
