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Survey shows good value beats lower prices for Egyptian consumers
Published in Daily News Egypt on 16 - 11 - 2011

CAIRO: Egyptian consumers are more likely to save money by buying value packages or buying goods on sale, according to the latest survey by Nielsen.
These strategies were more popular among respondents of the internet survey than shopping at value retailers, stocking up during purchase trips, or using coupons. Only 4 percent of Egyptian respondents said they would compromise on quality as prices increase.
And those prices are increasing. According to the World Bank, the price of cereals like wheat and rice rose by 16 percent in the second half of 2010. Rising food prices were widely cited as one of the reasons for the uprisings that toppled Hosni Mubarak earlier this year.
But in October, Egyptian annual consumer price inflation hit a four-year low, reaching 7.1 percent year-on-year, down from 8.2 percent in September, the state statistics agency CAPMAS said on Thursday. This was its lowest level since November 2007.
Core annual inflation, which strips out subsidized goods and volatile items including fruit and vegetables, slipped to 7.50 percent in the year to October from 7.95 percent in September, Reuters reported.
The Nielsen 2011 Global Online Shopping and Saving Strategies Survey asked more than 25,000 respondents in 51 countries about their shopping habits. The majority, 61 percent responded that “good value” is more important to them than “low price.”
“Value is not about price alone,” says James Russo, vice president of Global Consumer Insights for Nielsen. “Retailers and manufacturers who offer good values tailored around benefits of the product beyond price will resonate with consumers who continue to look for ways to stretch their money in a tough economy,” he added in a statement.
In Egypt, 56 percent responded that the primary reason for their shopping trip is to pick up a single item or “a few essential items.” This contrasts with the US and parts of Europe, where high gas prices lead consumers to stock up when they go to the store and to seek “larger, economy-sized packages.” In Egypt, on the other hand, consumers continue to make many trips.
“In the Middle East, price cuts are the most popular promotional vehicles used by retailers, along with volume discounts,” says Bassel Adel, director of retail services for Nielsen Middle East, North Africa and Pakistan.
But in other ways, shopping practices are changing. Nearly half of Egyptian respondents said they were likely to try a system of online ordering and home delivery for groceries.
This inclination towards online shopping is likely attributable to the survey's methodology. According to a statement, Nielsen's survey “is based on the behavior of respondents with online access only,” including countries with 60 percent internet penetration or an online population of 10 million.
The Egyptian Ministry of Communications and Information Technology reported that while 23 million Egyptians used the internet by the end of 2010, this only makes up for roughly 28 percent of the population.


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