Malaysians tighten purse strings on non-essentials
KUALA LUMPUR: Malaysians are tightening their purse strings on non-essential spending, with rising costs prompting households to prioritise necessities and value for money despite continued economic growth.
KUALA LUMPUR: Malaysians are reducing discretionary spending on non-essential items due to rising costs, prioritizing necessities and value for money. Analyst Walter Aw Lik Hsin noted that consumers are seeking cheaper products, convenience, and value while cutting back on clothing, lifestyle goods, and other non-essentials. This trend is evident in the earnings of 16 consumer companies tracked by CIMB Securities, with five staples companies (Nestle, 99 Speed Mart Retail Holdings, Life Water, QL Resources, and Fraser & Neave) showing strong revenue growth, while discretionary retailers (Eco-Shop, Mr DIY Group, MyNews, and 7-Eleven) grew revenue but saw a decline in core net profit due to higher costs.
The divergence between revenue and earnings suggests that while discretionary spending is still growing, it is increasingly concentrated in lower-value and semi-durable categories. Value-focused retailers and convenience operators are expected to remain relatively better positioned, while businesses with exposure to aspirational, lifestyle, and higher-ticket purchases may face a more challenging environment.
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