Sunday, March 26, 2023

Consumer purchasing behaviour shifts as inflation hits Malaysia

Social NewsConsumer purchasing behaviour shifts as inflation hits Malaysia

Consumers’ purchasing behaviour in Malaysia has been showing a declining shift as inflation kicks in, causing higher commodities prices and putting pressure on household budgets.

According to the Department of Statistics Malaysia (DOSM), the world oil prices have increased significantly since the conflict between Russia and Ukraine sparked, at the same time disrupting the supply chain and creating a ripple effect across the global economy.

It also reported that the country’s consumer price index (CPI) increased moderately by 2.2% in March, mainly due to an increase in food prices.

Speaking to Bernama, Lulu Hypermarket regional director Asif Moidu Ahamed said consumers are cautious in spending and only buy basic necessities rather than unnecessary goods these days.

“We can see consumers’ buying strategy changing. They are now very controlled and buy only necessary groceries or fresh goods such as vegetables, fruits, fish or chicken,” he said.

In addition, he also observed that customers are buying in lesser quantities which would affect retail turnover.

Asif noted many international brands are offering price reduction offers to attract customers, proved that customers’ buying trends have changed in value items and they are highly selective in purchasing.

On the other hand, Sunway University professor of economics Dr Yeah Kim Leng shares that household consumers would be less affected by the inflation with an increase in wages by 5 to 6%.

“The expected time for the price of goods to return to normal is still unpredictable depending on the duration of the Russia-Ukraine conflict as well as the ongoing sanctions on Russia that affect the global supply of key commodities,” he said.

Meanwhile, Yeah also urge consumers to be prepared for the rising prices of goods as it is expected to remain elevated for the rest of this year.

“What is important is that we note there will be higher inflation this year,” he said.

Yeah suggested that the government should ensure there is no shortage of consumer items and the supply chain remains intact to prevent severe escalation of prices of goods.

“It is important to make sure the supply chain remains intact and any pressure resulting from supply and demand can be measured either through subsidies or by expanding supply.”

“To ensure supplies are not disrupted, it could help by increasing production through incentives to boost production, for example, allowing the hiring of foreign workers to ensure that farm production continues,” he said.

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