The sluggish economy in 2009 has heightened consumers' anxiety about job security and future incomes, forcing them to focus on thrifty spending. Food is no exception. Although it is a necessity and has been the least affected by the economic tribulations on goods and services, it is still being marginalized by consumer adjusting their consumption behavior.
KASIKORN RESEARCH CENTER (KResearch) conducted a survey on the ;Food Consumption Behavior of Bangkok Residents” during January 9-23, 2009, using a sampling group of 1,025 persons. It was broadly categorized by profession as a mean indicator of economic sluggishness, where profession is a key variable influencing consumption behavior. This is because each profession is being affected differently with respect to job security and income, which are matters that respondents were most concerned. Moreover, private sector employees were the most vulnerable during an economic slump. The poll was further delineated by the sub-classification of pay schedules, i.e., salaried employees, as well as daily and hourly wage workers, plus those with performance-based earnings and contracted employees. The poll also emphasized many types of industries in Bangkok. Industries from which respondents were surveyed included producers of semi-prepared and instant foods, footwear, textiles, auto parts, furniture, garments and other businesses such as financial institutions, hotels, restaurants, auto repair garages, etc.
The survey found that 44.0 percent of Bangkok respondents expected that their future incomes might fall. Taking categorization by profession into consideration, civil servants and state enterprise employees seemed to be less affected by the sluggish economy than others as they were less concerned about their job security and future income. Thought to be most seriously impacted were, as above, private sector employees, where daily-and-hourly-based earners, contracted and performance-based employees seemed most concerned (salaried employees would seem to be the least concerned among private sector workers), followed by merchants and self-employed individuals.
The poll also showed that 66.4 percent of Bangkok respondents had changed their food spending behavior to match the sluggish economy in 2009. Their food consumption behavior had changed largely with respect to fresh, semi-prepared and instant foods, evidently. Fresh foods remain necessary for consumption. The fresh food purchasing behavior avowed by the majority of Bangkok respondents had changed, where different venues for purchase and smaller volumes at each purchase (as needed) were indicated. The most popular venues for fresh food purchases were becoming weekly- or monthly-scheduled markets, or grocery stores near home or office, or at open markets. For semi-prepared and instant foods, the majority of the sampling group expressed a preference toward reduced volume, changes in vendor, switching to other brands, or omission of these products altogether.
Semi-prepared and instant foods that the sampling group indicated changes in their consumption behavior could be divided into three groups according to their behavioral changes:
Products toward which consumers' purchasing behavior showed the most drastic changes (omissions and abstinence) include energy drinks and alcoholic beverages.
Products toward which consumers' purchasing behavior showed some changes included instant noodles, instant milk and other milk products, meat and fruit juice, because consumers viewed them as necessities and as healthy foods, though some might seek cheaper venues for their purchase or less expensive brands.
3. Products toward which consumers' purchasing behavior showed the least change included snacks, fast foods, instant or canned foods and baked goods. They are influenced by many relevant factors. Toward this group of products, the extent of changes in consumption was less than products in the first group, but changes in purchasing behavior relating to venue of purchase or brand was seen higher than products in the second group.
Amid this sluggish economy when employment and future income have become worrisome issues, consumers are tending to economize due to falling purchasing power and competition in the food business, particularly with semi-prepared and instant foods this year. It seems that consumers are placing lower significance on brand names and are becoming more price elastic. As product prices increase, sales volumes fall and consumers buy other products instead or reduce their consumption of the product. As a result, entrepreneurs will have to adjust and prepare to cope with this changing behavior in order to survive amid the economic downturn.