Exercise the power of your wallet

Lim Sian See

Consumers must realize that they are the number one reason why traders can increase their prices.

Traders will give all sorts of excuses why their prices have increased: GST, currency weakness, petrol price increase, cost or wages etc.

But consumers, or more specifically the demand and willingness from consumers to buy even if prices continue to increase is the reason why traders will continue to increase their prices.

Given that Malaysia is at economic full employment while incomes continue to rise, this means demand also continues to increase.

There is simply no incentive for traders to stop increasing prices if people continue to buy. Why stop?

GST was introduced 2 1/2 years ago on April 2015. How can it still cause inflation? Will you still be blaming GST 5 years from now or 10 years from now?

Before GST was introduced, prices were also increasing so all inflation cannot be blamed on GST.

Petrol prices were as high as RM2.70 per liter in 2008 and RM2.30 in 2014. But when petrol prices dropped to RM1.60 for many months in early 2016, no traders reduced their prices.

Recently, our currency had strengthened almost 10% from RM4.49 to RM4.06 to the USD, and again no prices were reduced.

When our currency strengthened from RM3.73 to the USD in 2009 to RM2.96 in 2013 – a more than 30% strengthening but again no prices were reduced.

For sure, prices will always increase. It increased during our great grandfather’s time, our grandfather’s time, our father’s time and our time. And it will increase during our children’s time too.

Fighting against inflation in the long-term is like fighting against aging. You will never win.

But that’s okay because most important of all is that our standard of living and our income increases at a faster pace than prices. Overall, no one can dispute that the standard of living and overall incomes of all Malaysians have improved.

In fact if prices do not ever increase, our wages and income will also not increase. It is inter-related.

However, unreasonable increases of prices that only benefits the traders is a separate matter.

If the price of a piece or roti canai increases 10sen when petrol price increases 20sen, you know that is not reasonable – especially when you realize the same piece of roti canai does not drop in price when the petrol price drops 70sen from RM2.30 to RM1.60.

We are not a communist dictatorial country and the govt cannot fix and monitor the prices for the literally tens of thousands of items sold in the hundreds of thousands of outlets throughout the country.

We are a free-market economy.

It is time for consumers to realize that you have the power to stop unreasonable price increases.

When you refuse to be taken advantage of and stop buying by selecting alternative products or outlets, demand will drop and traders will have no choice but to reduce prices in order to stay in business.

When the buying stops, prices will drop.

Source: Lim Sian See

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