Dian Kuswandini, The Jakarta Post, Jakarta | Sat, 05/24/2008 12:23 PM | Headlines
A significant number of Indonesian consumers say the government's decision to raise fuel prices will have no major impact on their shopping behavior, a survey by AC Nielsen says.
"About 24 percent of consumers surveyed say the fuel price increase, which will lead to other price increases, aren't that significant," Nielsen retail director Yongky Surya Susilo said Friday.
Should the fuel prices go up by 30 percent, he said, the expenditures of consumers would grow by Rp 300,000 per month.
"This amount of money is still small for them," he added.
Consumers would only reduce their shopping frequency but maintain their shopping quantity and consumption while staying loyal to their favorite brands, he said.
The middle-to-upper-income consumers, he said, would still consider brand loyalty important.
"They will still want to keep up their current lifestyle despite the price increases. They won't change to cheaper brands, but will only adjust their frequency of purchases," Yongky said.
Lower-income consumers will no longer be able to afford brand loyalty, he added.
"They prefer cheaper brands, products in smaller packages or 2-in-1 products."
The majority of consumers surveyed said their shopping behavior would be affected in minor ways by the fuel price increases.
Approximately 31 percent said they would delay major purchases of electronic goods and automobiles, 27 percent would decrease recreation, 19 percent would spend less on clothes, 18 percent would spend less on household products and 17 percent would spend less on food.
The survey was conducted from 1,393 male and female shoppers aged 15 to 65 in Jakarta, Tangerang, Bekasi, Depok, Bandung, Surabaya and Makassar, among people who spend more than Rp 1 million per month on household expenses.
In general, Yongky said, the majority of Indonesian consumers would remain resilient against the rising prices of goods.
He said the growth of fast-moving consumer goods (FMCG) in the past few years had continued to grow at double-digit rates despite the 125 percent fuel price increase in October 2005.
He said FMCG sales last year reached Rp 77.72 billion, increasing by 15.2 percent from 2006. The previous year, FMCG sales grew by 14.3 percent.
"We predict FMCG sales will be stable this year at 15 to 16 percent growth despite the fuel price increase," Yongky said.
The sales of consumers goods in the first quarter, he said, also suggested that overall consumers remained resilient against price increases.
"The sales volume of cooking oil, for example, increased by 42 percent despite an average price increase of 50 percent," he said, adding that instant noodles sales had increased by 29 percent despite an 8 percent increase in prices.
A significant number of Indonesian consumers say the government's decision to raise fuel prices will have no major impact on their shopping behavior, a survey by AC Nielsen says.
"About 24 percent of consumers surveyed say the fuel price increase, which will lead to other price increases, aren't that significant," Nielsen retail director Yongky Surya Susilo said Friday.
Should the fuel prices go up by 30 percent, he said, the expenditures of consumers would grow by Rp 300,000 per month.
"This amount of money is still small for them," he added.
Consumers would only reduce their shopping frequency but maintain their shopping quantity and consumption while staying loyal to their favorite brands, he said.
The middle-to-upper-income consumers, he said, would still consider brand loyalty important.
"They will still want to keep up their current lifestyle despite the price increases. They won't change to cheaper brands, but will only adjust their frequency of purchases," Yongky said.
Lower-income consumers will no longer be able to afford brand loyalty, he added.
"They prefer cheaper brands, products in smaller packages or 2-in-1 products."
The majority of consumers surveyed said their shopping behavior would be affected in minor ways by the fuel price increases.
Approximately 31 percent said they would delay major purchases of electronic goods and automobiles, 27 percent would decrease recreation, 19 percent would spend less on clothes, 18 percent would spend less on household products and 17 percent would spend less on food.
The survey was conducted from 1,393 male and female shoppers aged 15 to 65 in Jakarta, Tangerang, Bekasi, Depok, Bandung, Surabaya and Makassar, among people who spend more than Rp 1 million per month on household expenses.
In general, Yongky said, the majority of Indonesian consumers would remain resilient against the rising prices of goods.
He said the growth of fast-moving consumer goods (FMCG) in the past few years had continued to grow at double-digit rates despite the 125 percent fuel price increase in October 2005.
He said FMCG sales last year reached Rp 77.72 billion, increasing by 15.2 percent from 2006. The previous year, FMCG sales grew by 14.3 percent.
"We predict FMCG sales will be stable this year at 15 to 16 percent growth despite the fuel price increase," Yongky said.
The sales of consumers goods in the first quarter, he said, also suggested that overall consumers remained resilient against price increases.
"The sales volume of cooking oil, for example, increased by 42 percent despite an average price increase of 50 percent," he said, adding that instant noodles sales had increased by 29 percent despite an 8 percent increase in prices.
