- Shoppers Embrace Quality Over Low Prices
Shoppers now consider good quality and innovations over low price. They no longer compromise comfort for cheap items, writes TONIA ‘DIYAN.
In the past, the average shopper would go for products with low prices, but these days, good quality and innovations have become people’s main considerations. This trend, it appears, is attributable to convincing sales/promotions, well-stocked shelves and high-quality fresh products available. Therefore, to boost sales, as well as encourage shoppers, some retail shops launch attractive sales promos frequently.
Such promos, it was learnt, have worked for many shops over the years. According to retail experts: “Promotional offers are aimed at attracting more customers and enhancing sales. There are misconceptions that when discounts are offered by shops, such shops stock inferior products, that is why they sell at cheap rates just to do away with the so-called inferior products. It is not true.”
While factors relating to good quality, innovations and low prices are important determinants of where to shop and what to buy, retailers and manufacturers who offer good value, either through sales and promotions or via larger-economy packaging, stand to gain the most from hard-income-earning consumers in a tough economy such as Nigeria. That is why discount offers from some shops mean a lot to an average shopper.
Mr Todd Hale of Consumer & Shopper Insights, in a television interview, said: “For the economically challenged, low prices are a must, but convenience may trump low prices for some from discount retailers.
“For some shoppers, the value obtained from one-stop shopping can save them time and money. Therefore, manufacturers and retailers need to place a greater focus on shoppers’ benefits to achieve the differences that go beyond prices.”
Though price is a differentiator in any economy, store brand products, he said, must deliver a level of quality proportionate to their price points.
“Quality, at an affordable price, is what gets consumers to buy and repeat. If quality and value are lacking, then consumers will buy fewer store brands,” Hale said.
People no longer fancy cheap products; they prefer to buy products based on quality and the benefits such products have to offer. In the market today, there seems to be more new products than the old ones, especially for consumables such as canned foods which also come in sachet leaving the shopper with choices to make.
When reporters went round malls in Ikeja and Surulere, a large number of shoppers indicated their preference for quality and innovation over low price. Some others said they prefer innovation at low prices, and only a few of them said they prefer very low price not minding the value of the product.
Majority believe quality is not to be compromised; therefore while manufacturers are producing slightly low quality products, they should not forget to keep prices low as it is the least favoured option among consumers because raising prices is a strategy that consumers do not embrace. Consumers typically maintain reference prices for products based on prices they have seen or paid in the past.
A shopper, Mr Henry Nwanchukwu, said he prefers quality over low price.
“Low pricing could be deceptive; I am usually not deceived when I want to purchase an item. I make up my mind to go for quality so I can be sure of getting value for my money.”
Another shopper, Mr Okhiria Caleb, is of the view that good quality and innovation is better than low price if a person wants the best. “The life span of a quality product is longer than that of a cheap inferior product. You will only be buying what you need at once instead of buying the same thing twice because it is cheap,” he said.
Some people think the new products are either not trusted or they simply do not allow for patronage of the existing ones. May be because some people who will prefer to buy the new ones will want to explore them.
According to Mrs Kemi Badmus, a shop owner at Adeniran Ogunsanya Shopping Mall in Surulere, Lagos, bringing innovation into the market sometimes does not allow the sale of old products. “But if the new product is of a higher price than the already existing ones, then I am sure of selling my existing products. Therefore, innovations should be accompanied by low price, as it is generally known that low price is the driver of any shopper,” she said
Mrs Nsofor Chinwe prefers existing products. To her, existing products are better trusted.
She said: “I have come to trust existing products over the years. I can only be lured to buy newly introduced products if I can get a testimony from someone else about that product. Most times when I go shopping, I don’t check out new products, I simply pick the old names that I am used to.”
Some shoppers are of the view that new products should be discounted rather than sold at exorbitant prices so that people can be attracted to them.
A shopper, Mr. Stanley Omokaro, said discount offers should be attached to innovations so that shoppers can easily accept them when they are newly introduced into the market. “ It is only common with shoppers to want to buy new products at cheap rates. Some people would refuse to pay more or same amount as for an existing product for a newly introduced product,” Omokaro said.
Mr Odundayo Agboola is an economist. He prefers innovation to low price stating that the country’s poor economic condition is a major challenge to innovations. “My question is, will these innovations stay? Is our economy encouraging such? Modernism has been brought into production and now we get newly introduced good items. I believe that the newer a product, the better it is. Sometimes I get tired of the old product because some of them have reduced in quality. Therefore, I look forward to new products from time to time,” he said.
Egbin Decries N388B NBET Debt, Idle Capacity
Egbin Power Plc, the biggest power station in Nigeria, has said it is owed N388bn by the Nigerian Bulk Electricity Trading Plc for electricity generated and fed into the national grid.
The company disclosed this on Tuesday during an oversight visit by the Senate Committee on Privatisation, led by its Chairman, Senator Theodore Orji, to the power station, located in Ikorodu, Lagos.
The government-owned NBET buys electricity in bulk from generation companies through Power Purchase Agreements and sells it to the distribution companies, which then supply it to the consumers.
The Group Managing Director, Sahara Power Group, Mr. Kola Adesina, told the lawmakers that the total amount owed to Egbin by NBET included money for actual energy wheeled out, interest for late payments and available capacity payments.
Egbin is one of the operating entities of Sahara Power Group, which is an affiliate of Sahara Group. The plant has an installed capacity of 1,320MW consisting of six turbines of 220 megawatts each.
The company said from 2020 till date, the plant had been unable to utilize 175MW of its available capacity due to gas and transmission constraints.
Adesina said, “At the time when we took over this asset, we were generating averagely 400MW of electricity; today, we are averaging about 800MW. At a point in time, we went as high as 1,100MW. Invariably, this is an asset of strategic importance to Nigeria.
“The plant needs to be nurtured and maintained. If you don’t give this plant gas, there won’t be electricity. Gas is not within our control.
“Our availability is limited to the regularity of gas that we receive. The more irregular the gas supply, the less likely there will be electricity.”
He noted that if the power generated at the station was not evacuated by the Transmission Company of Nigeria, it would be useless.
Adesina said, “Unfortunately, as of today, technology has not allowed the power of this size to be stored; so, we can’t keep it anywhere.
“So, invariably, we will have to switch off the plant, and when we switch off the plant, we have to pay our workers irrespective of whether there is gas or transmission.
“Sadly, the plant is aging. So, this plant requires more nurturing and maintenance for it to remain readily available for Nigerians.
“Now, where you have exchange rate move from N157/$1 during acquisition in 2013 to N502-N505/$1 in 2021, and the revenue profile is not in any way commensurate to that significant change, then we have a very serious problem.”
He said at the meeting of the Association of Power Generation Companies on Monday, members raised concern about the debts owed to them.
He added, “All the owners were there, and the concern that was expressed was that this money that is being owed, when are we going to get paid?
“The longer it takes us to be paid, the more detrimental to the health and wellbeing our machines and more importantly, to our staff.”
Adesina lamented that the country’s power generation had been hovering around 4,000MW in recent years.
Oil Rises on U.S. Fuel Drawdowns Despite Surging Coronavirus Cases
Oil prices climbed on Wednesday after industry data showed U.S. crude and product inventories fell more sharply than expected last week, reinforcing expectations that demand will outstrip supply growth even amid a surge in Covid-19 cases.
U.S. West Texas Intermediate (WTI) crude futures rose 48 cents, or 0.7%, to $72.13 a barrel, reversing Tuesday’s 0.4% decline.
Brent crude futures rose 34 cents, or 0.5%, to $74.82 a barrel, after shedding 2 cents on Tuesday in the first decline in six days.
Data from the American Petroleum Institute industry group showed U.S. crude stocks fell by 4.7 million barrels for the week ended July 23, gasoline inventories dropped by 6.2 million barrels and distillate stocks were down 1.9 million barrels, according to two market sources, who spoke on condition of anonymity.
That compared with analysts’ expectations for a 2.9 million fall in crude stocks, following a surprise rise in crude inventories the previous week in what was the first increase since May.
Traders are awaiting data from the U.S. Energy Information Administration (EIA) on Wednesday to confirm the drop in stocks.
“Most energy traders were unfazed by last week’s build, so expectations should be high for the EIA crude oil inventory data to confirm inventories resumed their declining trend,” OANDA analyst Edward Moya said in a research note.
On gasoline stocks, analysts had expected a 900,000 barrel decline drop in the week to July 23.
“The U.S. is still in peak driving season and everyone is trying to make the most of this summer,” Moya said.
Fuel demand expectations are undented by soaring cases of the highly infectious delta variant of the coronavirus in the United States, where the seven-day average for new cases has risen to 57,126. That is about a quarter of the pandemic peak.
Oil Price Rises To $74.70 Despite Delta Variant
Oil price inched higher on Tuesday despite the fast spreading COVID-19 Delta variant. Brent crude oil, against which Nigerian oil is priced gained, $0.20 or 0.27 percent to $74.70 per barrel on Tuesday at 12:05 am Nigerian time.
Delta variant is spreading in China, the world’s largest importer of crude oil, forcing crude oil investors to start cutting down on their oil demand projections.
“The Delta variant is still spreading and China has started to clamp down on teapots, so their import growth would not be that much,” said Avtar Sandu, a senior commodities manager at Singapore’s Phillips Futures, referring to independent refiners.
Strong U.S. demand and expectations of tight supplies have helped crude oil to recover from a 7 percent slump recorded last Monday to mark their first gains in two to three weeks last week.
Global oil markets are expected to remain in deficit despite a decision by the Organization of the Petroleum Exporting Countries (OPEC) and allies, collectively known as OPEC+, to raise production through the rest of the year.
“There is seemingly a battle within the energy complex between the prevailing supply deficit engineered by OPEC+ and the threat of the COVID-19 Delta variant in regions with low vaccination rates,” said StoneX analyst Kevin Solomon.
“The slow take-up of vaccinations will continue to limit some upside in oil demand in those regions, and there will be intermittent spells in the recovery in the coming months.”
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