In Malaysia, we have just done something that few other countries have done – we will be abolishing GST (Goods and Services Tax). GST was introduced here back in April 2015. In 3 short (but long) years, it had contributed to a rather shocking rate of price increases of goods locally. Granted, not all of it is due to the GST – many other factors were at play. But GST was an easy and visible target.
With the new Government in place, GST has since been rated to 0% and it is expected to be abolished when Parliament sits in July.
Leaving aside my personal views on GST, I noticed quite quickly that for the most part, prices of goods were reduced by a factor of 1.06. In some cases, these reductions were quite significant. I was browsing on Ikea online, and immediately thanked my lucky stars for not dropping by earlier LOL!
I was also at The Body Shop within a few days of the announcement that GST was being removed, and I noticed that prices of products had been adjusted. So yes, they are lower than before. I also spotted similar price adjustments at various stores like Bobbi Brown. In fact, I just received an email from Sephora urging me to take advantage of the lower prices – tempting!
But I was also wondering if the reduction in prices at present might push you into shopping more than you did before? I asked this on Twitter, and the answers surprised me.
Personally speaking, I will say that it will not make me shop any more than I did before. If anything, I might actually shop less!
If there is something that the past 3 lean years taught me, it is that I could quickly and easily distinguish between “wants” and “needs”. I have been able to make that distinction for a while now, but it was quite rudely rammed home in the past couple of years. This is what most people on Twitter agreed on.
When you start realizing that your grocery bills are rising dramatically, despite not splurging on luxuries, it certainly makes you think about whether you really need that fancy nut butter. I enjoy grocery shopping, so it wasn’t too hard for me to notice when prices were going up on essential goods.
When it comes to beauty, I guess I became much more discerning about what I would buy, and more hardworking about finding alternatives. Often, these alternatives I could find online. Sometimes, I had to wait for them to arrive, but if I could get them cheaper, why not?
I still do the odd splurge, but it has been fewer and further between. I never put myself on a no-buy nor a low-buy. I don’t believe in doing that, because like a badly timed diet, you will bounce back and end up spending more than ever.
Instead, I just became a little more conscious about what I spent money on. I downloaded an expense-tracking app on my phone (It wasn’t a very good app so I’ve deleted it) and quite shocked myself at how much I was spending on frivolities, without even realizing it. A little coffee here, a little snack there, a new lipstick treat there all added up. So I basically became more conscious about my spending habits.
And today, I am quite careful. I do still buy on impulse some days. I also don’t restrict myself from treats or luxuries. But I certainly do not find myself spending any more money than I should, and am able to think and rethink if I really want something.
For me therefore, price reduction or not, I don’t forsee myself shopping more now that prices are reduced, compared to before this.
Will your shopping habits be affected by the new lower retail prices?
I do expect however, that prices will only really stabilize towards the end of the year when the new tax structure is in place. Only then will we know if prices will remain more stable, or if there will be another round of price hikes. Also, because so many of our beauty products are imported, I believe that exchange rate factors will play a large part as well. So, it will be a little too early to tell if prices will remain low. But from now till September 2018, these are probably the lowest we’ll see prices for a while so if there’s a big ticket item you’re eyeing, now’s the time! 😀
Will that make you stock up and shop more these 3 months? 😀