LONDON/GDANSK/KAZAKHSTAN Seyda Bal, who works at a bank in Istanbul, is so anxious about the rising price of groceries that she’s lapsed into a pandemic-era habit: hoarding packaged goods like coffee and toilet paper.
Bal, 27, stated that she buys basic foods like oil, pasta, rice and tahini because it is likely that they will be twice as expensive next month.
Russia’s invasion in Ukraine has driven energy and grain prices up to new heights, increasing the price of packaged goods. This has been particularly evident in North Africa and Asia, which have higher food and fuel costs than the United States. Some shoppers are forced to store non-perishable goods.
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Nestle, the largest packaged food company in the world and home to over 2,000 brands, has noticed this trend.
According to Karim Al Bitar (head of Nestle’s Middle East & North Africa (MENA), consumer research, and market intelligence, the Swiss group is changing its product ranges to be more relevant to consumers in the region.
This could mean increasing the pack size or switching to cheaper ingredients.
Al Bitar said that Nestle was hoarding bouillon and soups to a certain extent, as well as coffee,” he told Reuters.
He said that Nescafe and Maggi coffee sachets are popular stockpiling products.
Nestle has been working with local partners in order to overcome supply problems and has managed to keep stock on the shelves so far, according to an emailed statement.
Nestle’s annual sales are influenced by the MENA region, which contributes more than 4% or 3.7 billion Swiss francs ($3.9billion). Central Asia, which includes the region of MENA, accounts for approximately 9% or 8 billion Swiss francs.
STOP BUYING, OR PAY MORE DOWN THE ROAD
Shoppers are spending less on non essentials like clothes and electronics, but there is a growing demand for personal care products. Hani Weiss, CEO at Majid Al Futtaim Retail which has more than 450 Carrefour stores (EPA: CARR), in 16 countries across the Middle East, Africa, and Asia, stated that shoppers are spending less on non-essentials.
What does this tell us about people’s concerns? Weiss stated that stock availability was a concern, adding that the retailer was experiencing inflation of 9.5% on average and pressure from countries like Egypt, Kenya, and Georgia.
Many countries in North Africa, Central Asia and the Middle East are experiencing recurring shortages of essential necessities. Kamile Botyriute, Euromonitor International analyst, said that people in Tunisia and Libya were experiencing difficulty finding sugar, flour, and baked goods. Botyriute stated that in August, shops in Tunisia started rationing products to prevent consumers hoarding.
Eldar, a Kazakh entrepreneur, said that he has bought approximately 10 50-kilogram bags flour and about the same amount of sugar. “I heard rumors of sugar shortages and wanted to stockpile.”
Ivan, 47 years old, is a furniture designer in the same city. He said that prices may rise, but the dollar (exchange rate), may fall. Then you start to think: Either I stock up at current prices, or I’ll have to pay more later.
BILLS. BILLS. BILLS.
Inflation is rising faster in many Central Asian and North African nations than it is in North America and Europe. Consumer price growth in the 19 euro-zone countries accelerated to 8.9% in July.
Turkey’s annual inflation reached a 24-year-high of 80% in August. Egypt’s was 13.6% in July. In many cases, import costs are increasing due to weakening local currencies.
“In Turkey, consumers are adapting to the reality of high inflation. In July, Unilever CEO Alan Jope stated that despite higher prices, consumers and market volumes are holding up due to partially pantry loading. Sinem Ozel, a 31-year-old marketing specialist living in Istanbul has been stocking up oil, toothpaste, sugar, and dishwashing detergent. She used to spend 300-400 Turkish Liras ($16.71-$22.27), but now she spends the same amount in one day. Sometimes, she even buys Nescafe’s three-in-1 20% instant coffee.
Related: The Pakistan Stock Exchange lost 274 points in price.
However, not everyone can afford hoarding.
Layla, a 60 year-old shop assistant, said that she doesn’t have enough money to purchase large quantities of merchandise. She was standing in front Lafayette Market in Tunisia. “Most of us have to borrow money from our relatives to finish the month.
($1 = 18.1455 liras)
($1 = 0.9643 Swiss francs)