THE cost of consumer goods may rise again, following a cost hike in logistics and the supply chain, industry players warned.

This trend is expected to continue into next year, which may see food prices rise by 10% to 30% – including the price of cooking oil, which has increased up to 70% this month, while the prices of daily necessities and household products have increased by 5% to 10%.

Nestle’s coffees, teas and other beverages have seen a 5% price hike, while household items such as diapers, laundry detergent and toilet paper have seen a 5% to 8% price hike, according to Mydin managing director Ameer Ali Mydin.

He said this is due to a shortage of supplies and the high cost of logistics, adding that the government cannot be blamed as it cannot control the price hike.

Chaang, who has been running a sundry shop for years, said suppliers are feeling the pinch of rising prices this month.

He said compared with two months ago, the current prices of cooking oil are up by 70%, condensed milk up by 20%, Milo up by 10%, biscuits up by 10%, chilli sauce and ketchup up by 10%, bread up by 10%, canned food up by 15% and seasoning such as soy sauce up by 20% to 30%.

He added that the prices of floor cleaners are 10% higher, and predicts a laundry detergent shortage due to limited supply.

As most goods are imported from China, shipping is expensive and takes a long time, and because China is facing a raw material shortage, it needs to import the materials, which contributes to the high costs, he added.

Chaang said grocery stores have no time to adjust prices and will suffer losses because they cannot keep up with reorganising shelves in tandem with the rising costs.

“Each time an order is made, the wholesaler will announce the price hike. The last batch of goods have not yet been sold out, but the wholesalers will announce the price hike when the goods are about to be restocked.

“The staff will organise the items on the shelves first and then update the prices. If the cash register is updated (and there is a price mismatch), customers will question the prices and we will have to bear the losses.

“We have been in business for 20 years, and this is the first time we have faced such a problem.”

KK Group founder and executive chairman K.K. Chai told The Malaysian Insight that the price hikes will continue until next year.

He said shipping charges increased by 100% last month, resulting in the rise of prices of imported goods.

He said raw material prices have also swelled and discounts do not help, adding that the overall cost of local products has increased by 5% to 10%, while the overall cost of imported products has increased by 20% to 30%.

“This is a double-edged sword. Imported goods are already expensive, and the retailer cannot afford to provide discounts.

“We can do promotions only for a short period as the prices of almost all products have gone up, not just for two or three products.”

For example, Chai said, the 30% rise in plastic prices has caused an uptick in the costs of plastic bags and receipts in convenience stores, which are forced to mark up products to cover operational costs such as rent.

Federation of Sundry Goods Merchants Associations of Malaysia president Hong Chee Meng said grocers sell goods at supplier-set prices.

“Suppliers will give quotations almost every week, and grocers are also caught off guard.”

He said local grocers enjoyed a 30% increase in business during the earlier stages of the pandemic as residents could not travel far due to movement restrictions.

However, since movement restrictions were lifted, competition has become stiffer, he added.

Hong said the prices of cartons and paper bags have increased four-fold since March last year.

“If sellers can absorb them (price hikes), they will not increase their price tags. If they cannot afford them, they will increase their price tags,” he said, adding that consumers’ purchasing power has also declined.

Ameer also said consumers’ purchasing power has declined.

“From the start of the epidemic until now, the footfall in shopping malls has doubled. However, the actual purchasing power (of consumers) is only about 70%.”

This is because people do not have enough money and the epidemic has yet to subside, he added. – December 8, 2021.