Over two-thirds of Singaporean consumers are taking food inflation on the chin, saying they can absorb rising prices in their household budgets without having to make spending cuts elsewhere, according to a report released by Nielsen.
The research company’s Global Survey of Inflation Impact found that 69% of respondents in the country said they were unlikely to make any significant spending cuts to cope with rising food prices – a figure that is well above the global average of 50%.
Those who said they 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.
“As income levels steadily increase throughout the region, many Southeast Asian consumers appear to be taking the rising cost of living in their stride,” said Matthew Krepsik, executive director of Nielsen’s Marketing Effectiveness Practice in Southeast Asia, North Asia and Pacific.
Neighbours follow suit
Most respondents in other Southeast Asian nations also said higher food costs would not force them to make major spending cuts elsewhere — the figure was 78% in Thailand, followed by Indonesia (70%), Vietnam (%), Malaysia (66%) and the Philippines (58%).
Of the Singaporeans queried in the survey who said that they would rethink their household budget, 72% said that they would look to adjust their outlay on out-of-home dining, followed by new clothes and accessories (59%), snack foods (49%) and recreation and entertainment (45%).
Consumers in the other Southeast Asian countries also named those four areas they are most likely to cut back on as well.
“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,” said Krepsik.
Snack foods vulnerable
Food categories most vulnerable during inflationary times include products such as sweets and biscuits, crisps and other snack foods, carbonated beverages and alcoholic beverages.
Meanwhile, the study revealed that 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.
“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,” added Krepsik.