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Majority Of Southeast Asian Households Unfazed By Looming Food Inflation

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  • As many as three in four Southeast Asian consumers say their household budgets could handle a rise in inflation
  • Consumer outlay on staple food products largely immune to inflationary pressure while processed sweets, snacks and beverages most vulnerable to changes in spending

Singapore, 8 October 2013: Consumers in Southeast Asia are relatively unconcerned by looming food inflation, with the majority indicating there is enough flexibility in their household budget to absorb a rise in food prices without having to make significant sacrifices to their spending in other areas according to a report released today by Nielsen, a leading global provider of information and insights into what consumers watch and buy.

Nielsen’s Global Survey of Inflation Impact polled more than 29,000 Internet respondents in 58 countries to understand how respondents around the world of all income ranges were coping with rising food prices. The study identified the countries, categories and retail channels that were more insulated to weather hard economic times and those which were more vulnerable.

More than three quarters (78%) of Thai consumers said there was enough flexibility in their household budget to handle a rise in food prices without having to make major spending cuts elsewhere, followed by Indonesia (70%), Vietnam (70%), Singapore (69%), Malaysia (66%) and the Philippines (58%), with all Southeast Asian markets scoring well above the global average of 50 percent. (See Chart 1).

While the majority of Southeast Asian consumers were unlikely to make significant spending cuts to cope with rising food prices, many indicated they would look to adjust their outlay on out-of-home dining, new clothes and accessories, recreation and entertainment, and snackfoods to off-set food inflation (see chart 2). Food categories which were most vulnerable during inflationary times included discretionary products such as candies, cookies and other sweets, chips and other snack foods, carbonated beverages and alcoholic beverages (See Chart 3), while staple products 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.

Buying items while on sale, stocking up on regular items and buying larger pack sizes were the three key actions consumers said they would take to deal with food inflation.

“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. “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 powerand the scale of goods and services required to meet the needs of consumers in both developed and developing Southeast 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.”

When asked about how rising food prices may influence where they purchase grocery items, shopping more often at discount stores was the most likely change cited by consumers in Singapore, Malaysia, Philippines and Indonesia, while in Thailand and Vietnam consumers indicated they would be most likely to grow their own food. Consumers across Southeast Asia also indicated a strong likelihood to shop more at de-stocking and clearance stores and warehouse club stores. (Chart 4)

During times of rising food prices, consumers across all six Southeast Asia market said they were most likely to respond by stocking up on regular use items when they are on sale and purchasing only sale-priced items, with the exception of Vietnam where using social media to find specials was the most likely change consumers would make to cope with the increasing price of food. (Chart 5)

Despite buoyant consumer confidence and rising income levels across the region, the Nielsen survey revealed a number of consumers were still living day-to-day, with more than one in two (55%) Filipino and Vietnamese consumers saying they only had enough money for shelter, food and basics over the past year – 11 percentage points higher than the global average of 44 percent. In Malaysia close to half of consumers (48%) were living on wages which only covered shelter, food and basics, as were 42 percent of Thais, and around one third of Indonesians and Singaporeans (34%). (See Chart 6)

“While Southeast Asia’s middle class population is growing rapidly, there remains a large proportion of consumers in both developed and developing countries in the region who are merely subsisting,” observed Krepsik. “As increased cost-of-living is realised, it is these consumers who will be most significantly impacted.”

About the Nielsen Global Survey

The Nielsen Global Survey of Inflation Impact was conducted between February 18 and March 8, 2013, and polled more than 29,000 consumers in 58 countries throughout Asia-Pacific, Europe, Latin America, the Middle East, Africa and North America. The sample has quotas based on age and sex for each country based on their Internet users, and is weighted to be representative of Internet consumers and has a maximum margin of error of ±0.6%. This Nielsen survey is based on the behavior of respondents with online access only. Internet penetration rates vary by country. Nielsen uses a minimum reporting standard of 60 percent Internet penetration or 10M online population for survey inclusion. The Nielsen Global Survey, which includes the Global Consumer Confidence Survey, was established in 2005.

About Nielsen

Nielsen Holdings N.V. (NYSE: NLSN) is a global information and measurement company with leading market positions in marketing and consumer information, television and other media measurement, online intelligence and mobile measurement. Nielsen has a presence in approximately 100 countries, with headquarters in New York, USA and Diemen, the Netherlands. For more information, visit


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