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22 October 2008
Taipei
Almost all people in Taiwan are feeling the effect of inflation and more than half are making lifestyle adjustments to cope with the situation, according to a recent internet survey conducted by The Nielsen Company.
The Nielsen Inflation Survey was conducted from August 25 to September 1 among 1,053 internet users in Taiwan, aged between 12 and 49 years. As the survey reveals, as many as 85 percent of consumers in Taiwan expect inflation to continue in the next 12 months.
“People’s concern about retail price levels has been around for a while. The inflation issue has become an unwelcome household term as consumers’ wages and pay packets have been stretched to their limits,” said Gordon Stewart, Managing Director, The Nielsen Company Taiwan. “Inevitably, consumers have to make lifestyle adjustment and prioritize their budgets.”
According to the Nielsen Inflation Survey, Leisure/Entertainment (68%), Energy Bills (67%), New Clothes and Accessories (61%) are the top three items to be cut back when the going gets tough, followed by Eating Out (53%), High-Tech Products (49%) and Driving (43%).
According to Nielsen MarketTrack, which continuously monitors the sales of Fast Moving Consumer Goods (FMCG) in Taiwan, prices of staple items are increasing at a higher rate than that of non-essentials. The price spikes in staple items such as Edible Oil, Packaged Rice, Instant Noodles, Soy Sauce and Noodle Sticks have registered an increase in their retail price in the range of 6 to 34 percent, while prices in non-essential or less critical items like Biscuits, Ice-cream, Gum and Snacks have increased by three to eight percent.
To cope with the inflationary environment with a stretched budget, Taiwanese consumers are tightening their purse strings on non-essential items. Nielsen MarketTrack shows that the total value of commodity items from January to July 2008 grew 12 percent compared to the same period last year, while spending on ‘nice-to-have categories’ dropped by four percent.
There are also consumers who now seek cheaper alternatives via the same channel when buying essential goods, such as Rice, Edible Oil, Soy Sauce, Home Surface Cleaner and Toilet Paper etc. and buy less nice-to-have products such as Instant Coffee/Tea Bag, Biscuits/Candies/Snacks, Soft-Drinks, and Chewing Gum etc.
As more people are cutting down on “Eating Out” (53%), the volume consumption of “eat-at-home” categories, such as Ready to Serve Frozen Foods, Noodle Sticks, Hot Pot, and Frozen Vegetable/Dumplings, has increased in a range of 2 to 15 percent, according to MarketTrack.
“Given the current economic environment, we expect to see more belt-tightening among consumers to cope with the situation, along with keener competition among food suppliers, manufacturers and retailers,” added Mr Stewart.
About The Nielsen Company
The Nielsen Company is a global information and media company with leading market positions in marketing and consumer information, television and other media measurement, online intelligence, mobile measurement, trade shows and business publications (Billboard, The Hollywood Reporter, Adweek). The privately held company is active in more than 100 countries, with headquarters in New York, USA. For more information, please visit, www.nielsen.com
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