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Dealing with inflation: Cutting spending and working more
Contrary to all predictions, small merchants have not raised prices in spite of input price increases. Instead, they are trying to deal with high inflation by cutting down expenses and doing more work.
A Saigon Tiep Thi reporter went to Tan Son Nhat Market a few days ago to have his jeans repaired. To his surprise, the tailor asked for only 10,000 dong instead of 15,000 as usual. The shop’s tailor explained: “If I ask for a lot of money, my clients will stay away and I will starve to death.”
Last Tet, the same tailor decided to raise service fees from 10,000 dong to 15,000 since everything was more expensive and he needed to be able to feed himself and his family members.
The reporter noted that this tailor’s tale demonstrates how different people have multiple ways to deal with the price storm.
Ngoc, the owner of a Ban Co Market grocery, remarked that “Purchasing power is very weak, so how can I dare to raise prices? I must cut a lot of expenses to make a profit.”
Previously, she had to pay for the lunch of her workers, some 13,000 dong per person. Now the price has risen to 15,000. Goods transportation costs has increased by 5,000 dong and Ngoc also must pay around one million dong for electricity, water and sundries.
Now, she has decided to cut down on all these expenses. She wakes early to prepare meals for workers. She also delivers goods to loyal clients herself instead of hiring xe om (Motorbike taxis).
“I can still live well over the last two weeks. The measures I have taken allow me to keep the same total expenses and the same profit,” Ngoc revealed.
Phung, a footwear wholesaler at An Dong Market, once raised the wholesale price by 2,000-3,000 dong per pair of shoes, because the input material prices all increased sharply.
Her retailers did not accept the price increases and finally Phung decided to cut her labor force and offer higher wages to remaining staff to work with higher capacity. She laid off four workers and saved 6.4 million dong, which she will spend on other work.
The owner of a production workshop at Tan Binh Market has decided to close his kiosk for the first two months of 2010, allowing him not to save on taxes. He explained that he will only open the workshop again when he gets more orders.
Duc has been a motorbike taxi driver, but is switching to a new career: mending punctures. The job brings him 30-50,000 dong a day, enough to pay his rent. He can follow his new career when he lacks customers for his taxi service, which provides him 60-100,000 dong per day that he uses for meals and medicine.
Prices are getting higher, life is more difficult, but people continue striving to live well.
VietNamNet, SGTT
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