IT’S TRUE, ‘THE CAPTAIN IS THE CONSUMER’
Malaysians are spending; they are buying goods at a wide array of brickand-mortar and online outlets
AFRIEND of mine, furious at having to pay RM5 for a simple plate of nasi lemak in Petaling Jaya new town for breakfast, yesterday turned to Facebook to voice his displeasure.
Posting a picture of the dish, Anwardi Jamil wrote: “RM5. Salah kedai. Bukan salah kerajaan. Last time datang kedai ni” (“RM5. The shop’s fault. Not the government’s fault. This is the last time I am coming here”.)
Of course, then came at least two dozen comments on his posting, with some trying to overanalyse the situation. “Ikan bilis yg mahal,” (The anchovies are expensive) one wrote.
Another chap went a step further: “Sambal sotong kering kut buat mahal dan mungkin pula guna ikan bilis yang se kilo RM50 (“It must be the squid sambal that made it costly, and maybe they used anchovies that were sold at RM50 per kg”).
By the way, ikan bilis normally costs RM30-40 per kg. But there had been news reports suggesting that in some places in the country, the prices had gone up to between RM55 and RM64 per kg.
The ikan bilis issue aside, at least the guy who was irritated by his nasi lemak seller did not try to shift the blame to the government.
Malaysians are quick to blame the government for everything, including what they buy and consume.
But in a free market, consumers can exercise their freedom of choice. They can refuse to buy from companies that sell substandard products.
They can choose Uber and Grab and refuse the highly regulated local taxi monopoly, which is often typified by old, uncomfortable, and poorly maintained taxis caused by tight regulations and lack of competition.
Freedom of choice is best secured by allowing true freedom for both entrepreneurs and consumers, economists say.
Entrepreneurs “are at the helm and steer the ship”, according to Austrian-American economist Ludwig von Mises.
“But they are not free to shape its course. They are not supreme, they are steersmen only, bound to obey unconditionally the captain’s orders” he wrote in Human Action. “The captain is the consumer.”
By the way, Mises, who passed away in 1973, was the acknowledged leader of the Austrian School of economic thought, a prodigious originator in economic theory, and a prolific author.
So, if your chain of retail shops and hypermarkets is not doing well, you cannot simply put the blame on the consumers, the economy or the government.
The public spat between the government and Mydin managing director Datuk Dr Ameer Ali Mydin, sparked by the hypermarket chain’s loss of its Kedai Rakyat 1Malaysia (KR1M) franchise, is one case in point.
Economic planning minister Datuk Seri Abdul Rahman Dahlan has dismissed Ameer Ali’s notion that despite Malaysia’s strong economic growth, Malaysians don’t have money to spend.
Ameer Ali, in a rare radio interview a week ago, had dropped a bombshell, saying the hypermarket chain had suffered RM100 million in losses by participating in the government’s KR1M project because consumers were not spending.
“Consumers don’t seem to have enough money to spend on groceries,” the Mydin boss said, adding that this could be noticed as hypermarket sales have been declining.
“For domestic consumption, they are basic goods. But hypermarkets and supermarkets in Malaysia, which control 50 per cent of the grocery market, have registered negative growth,” he said. “I think people just don’t have the money.”
Rahman, in a strong rejoinder, said the hypermarket boss was wrong in his assumptions.
According to Rahman, one possible contributor to such a scenario was that the number of non-specialised stores had increased from 66,920 in 2016 to 73,848 last year.
“This alone could be one of the reasons why some hypermarkets are facing slowing sales as consumers have more places to shop.”
Online grocery shopping is catching up. The convenience of shopping online has also contributed to people not going to hypermarkets and supermarkets as much as they did before, said Rahman.
In fact, hypermarkets that are larger than 60,000 sq metres are finding it hard to stay sustainable given the online onslaught and the mushrooming of smaller grocery stores.
For example, NSK Trade City outlets, which are known for bargain fresh food items, has at least 20 stores nationwide while 99 Speedmart has some 1,000 now.
Jaya Grocers, an upmarket grocery store, is also expanding. It is adding another five stores this year, raising the number nationwide to 27.
Ironically, Mydin is also growing, opening its third hypermarket in Sarawak just two weeks ago. The outlet in Petra Jaya in Kuching is Mydin’s 27th hypermarket and 77th outlet in the country.
Ameer Ali said he invested RM200 million in the Petra Jaya complex, which has a 812,090sq ft shopping complex, with a 299,598sq ft hypermarket area and 512,492sq ft mall section. It also has 52 retail and 10 bazaar lots.
Put simply, the big boss of Mydin will not be putting his money in Sarawak if he sees no eventual returns from his huge investments.