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Shoppers Embrace Quality Over Low Prices

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consumer goods
  • 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.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

Crude Oil

Nigeria Pumps 236.2 Million Barrels in First Half of 2024

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Nigeria pumped 236.2 million barrels of crude oil in the first half of 2024, according to the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).

This figure represents an increase from the 219.5 million barrels produced during the same period in 2023.

In January, Nigeria produced 44.2 million barrels of crude oil while February saw a slight dip to 38.3 million barrels, with March following closely at 38.1 million barrels.

April and May production stood at 38.4 million barrels and 38.8 million barrels, respectively. June’s output remained consistent at 38.3 million barrels, demonstrating a stable production trend.

Despite the overall increase compared to 2023, the 2024 production figures still fall short of the 302.42 million barrels produced in the same period in 2020.

This ongoing fluctuation underscores the challenges facing Nigeria’s oil sector, which has experienced varying production levels over recent years.

On a daily basis, Nigeria’s crude oil production showed some variability. In January, the average daily production peaked at 1.43 million barrels per day (mbpd), the highest within the six-month period.

February’s production dropped to 1.32 mbpd, with a further decrease to 1.23 mbpd in March. April saw a modest increase to 1.28 mbpd, which then fell again to 1.25 mbpd in May. June ended on a positive note with a slight rise to 1.28 mbpd.

The fluctuations in daily production rates have prompted government and industry leaders to address underlying issues.

Mele Kyari, Group Chief Executive Officer of the Nigerian National Petroleum Company Limited (NNPC), has highlighted the detrimental effects of oil theft and vandalism on Nigeria’s production capabilities.

Kyari emphasized that addressing these security challenges is critical to boosting production and attracting investment.

Kyari also noted recent efforts to combat illegal activities, including the removal of over 5,800 illegal connections from pipelines and dismantling more than 6,000 illegal refineries.

He expressed confidence that these measures, combined with ongoing policy reforms, would support Nigeria’s goal of increasing daily production to two million barrels.

The Nigerian government remains focused on stabilizing and enhancing oil production. With recent efforts showing promising results, there is cautious optimism that Nigeria will achieve its production targets.

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Crude Oil

Oil Prices Steady Amid Mixed Signals on Crude Demand

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Crude oil

Oil prices remained stable on Thursday as investors navigated conflicting signals regarding crude demand.

Brent crude oil, against which Nigerian oil is priced, settled at $85.11 a barrel, edging up by 3 cents, while U.S. West Texas Intermediate (WTI) crude dipped by 3 cents to $82.82 a barrel.

The stability comes as the U.S. economy shows signs of slowing, with unemployment benefit applications rising more than expected.

Initial claims increased by 20,000 to a seasonally adjusted 243,000 for the week ending July 1, prompting speculation that the Federal Reserve might cut interest rates sooner than anticipated. Lower rates could boost spending on oil, creating a bullish outlook for demand.

Fed officials suggested that improved inflation and a balanced labor market might lead to rate cuts, possibly by September.

“Healthy expectations of a Fed rate cut in the not-so-distant future will limit downside,” noted Tamas Varga of oil broker PVM.

However, rising jobless claims signal potential economic easing, which could dampen crude demand.

John Kilduff of Again Capital highlighted the impact of a slowing economy on oil consumption despite a significant drop in U.S. crude inventories last week.

Global factors also weighed on the market. China’s economic policies remain steady, though details are sparse, affecting investor sentiment in the world’s largest crude importer.

Meanwhile, the European Central Bank maintained interest rates, citing persistent inflation.

An upcoming OPEC+ meeting in August is expected to assess market conditions without altering output policy, according to sources. This meeting will serve as a “pulse check” for market health.

Overall, oil prices are caught between economic concerns and hopes of a rate cut, maintaining a delicate balance.

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Crude Oil

Oil Prices Slide on China Demand Concerns, Brent Falls to $83.73

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Crude Oil - Investors King

Oil prices declined on Tuesday for the third consecutive day on growing concerns over a slowing Chinese economy and its impact on global oil demand.

Brent crude oil, against which Nigerian oil is priced, dipped by $1.12, or 1.3% at $83.73 a barrel, while U.S. West Texas Intermediate (WTI) crude dropped $1.15, or 1.4%, to close at $80.76.

The dip in oil prices is largely attributed to disappointing economic data from China, the world’s second-largest economy.

Official figures revealed a 4.7% growth in China’s GDP for the April-June period, the slowest since the first quarter of 2023, and below the forecasted 5.1% growth expected in a Reuters poll.

This slowdown was compounded by a protracted property downturn and widespread job insecurity, which have dampened fuel demand and led many Chinese refineries to cut back on production.

“Weaker economic data continues to flow from China as continued government support programs have been disappointing,” said Dennis Kissler, Senior Vice President of Trading at BOK Financial. “Many of China’s refineries are cutting back on weaker fuel demand.”

Despite the bearish sentiment from China, there is a growing consensus among market participants that the U.S. Federal Reserve could begin cutting its key interest rates as soon as September.

This speculation has helped stem the decline in oil prices, as lower interest rates reduce the cost of borrowing, potentially boosting economic activity and oil demand.

Federal Reserve Chair Jerome Powell noted on Monday that the three U.S. inflation readings over the second quarter “add somewhat to confidence” that the pace of price increases is returning to the central bank’s target in a sustainable fashion.

This has led market participants to believe that a turn to interest rate cuts may be imminent.

Also, U.S. crude oil inventories provided a silver lining for the oil market. According to market sources citing American Petroleum Institute figures, U.S. crude oil inventories fell by 4.4 million barrels last week.

This was a much steeper drop than the 33,000 barrels decline that was anticipated, indicating strong domestic demand.

The International Monetary Fund (IMF) also weighed in, suggesting that while the global economy is set for modest growth over the next two years, risks remain.

The IMF noted cooling activity in the U.S., a bottoming-out in Europe, and stronger consumption and exports for China as key factors in the global economic landscape.

In summary, while oil prices are currently pressured by concerns over China’s economic slowdown, the potential for U.S. interest rate cuts and stronger domestic demand for crude are providing some support.

Market watchers will continue to monitor economic indicators and inventory levels closely as they gauge the future direction of oil prices.

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