(Oct 23): Sharifah has kept her roadside nasi lemak stall afloat, thanks to Kedai Rakyat 1Malaysia (KR1M), and relies on the store’s cheaper house brands for half of the stuff she needs to run her business outside a block of flats in Sunway Mentari, Selangor.

Her views echoed that of many of the 30 working class families and small food operators surveyed by The Malaysian Insider on whether they felt they were getting value for money from shopping at KR1M, which now has more than 250 outlets nationwide.

KR1M is a cornerstone of Datuk Seri Najib Razak’s administration’s efforts to help low-income Malaysians and Budget 2016 to be tabled in the Dewan Rakyat today is expected to announce more KR1M outlets opening around the country as part of plans to help the bottom 40% of households who earn an average of RM2,500 a month.

The chain, however, has endured sporadic criticism ever since it was launched in 2010, including claims that its goods were pricier than other supermarkets and accusations that its house brands were of inferior quality.

Although KR1M has helped her, Sharifah and half of those surveyed felt that in the end, it was like any other store – it has cheaper goods but some of the other goods were more expensive than other chain stores, and the smart consumer cannot just depend on KR1M to save money.

A KR1M spokesperson, when contacted, said claims of substandard house brands were just a perception and stressed that the 1Malaysia goods were cheaper than those of other brands.

KR1M was not a profit-making venture and some of the goods were priced at a level where they would not lead to a loss, the spokesperson said.

Cheaper, not necessarily popular

About 50% of the families and individuals polled said KR1M was the same as any other store in terms of price and quality of goods sold, as besides its 1Malaysia house brand, the chain also carries brands found in other stores such as Nestle, Ayam brand and F&N.

What distinguishes KR1M are its 1Malaysia brand goods which include almost every commonly used household product from diapers, bath gels, dishwashing liquid and facial tissues to dry foods, such as chocolate malt powder, cordial mixture, rice, eggs, sweetened creamers and biscuits.

These are 20 sen to RM1 cheaper than conventional brands. But being cheaper does not necessarily mean popular.

All but three of the 30 customers surveyed said they bought the 1Malaysia brand. But only seven of the 30, or 23% of participants in the survey, said that more than 50% of all their shopping at KR1M consisted of 1Malaysia house brand goods.

About 40% or 12 of those interviewed said 20% or less of all the stuff they bought at KR1M consisted of its house brand. Some 26% or eight of the respondents said KR1M products made up 20% to 50% of their shopping.

In other words, a majority of KR1M shoppers in the survey still bought more conventional brands for most of their needs even though these are more expensive that the 1Malaysia house brand.

Most shoppers treated KR1M like a convenient sundry shop and did not necessarily visit the outlets for the house brands.

“It’s more like a sundry shop that you visit when you run out of something at home but don’t have time to go to the supermarket,” said one shopper who wanted to be known as Aznil, 35.

Only 27% (eight respondents) said that they did all their household shopping at KR1M and these were ones who had 50% or more of the 1Malaysia house brands in their total purchases. The rest went to other stores for their monthly supplies.

Those surveyed comprised food hawkers, students, bachelors, couples and families living in working class neighbourhoods surrounding three KR1M outlets in the Klang Valley. The outlets are in Pantai Permai Pantai Dalam, on Jalan Sungai Tua, Batu Caves and in Desa Mentari, Subang Jaya.

When asked how they rated KR1M in terms of price and quality compared with other sundry shops and supermarkets, such as Giant, Tesco, Econsave, half of the respondents said KR1M was the “same”.

Some 40% said KR1M was better than other stores and the remaining 10% said it was worse.

Malaysians expect better

Reena, (not her real name) said she had expected better of KR1M given all the hype that it would offer cheaper goods. She pointed to a rival store chain across the road from the KR1M outlet she had just exited.

“You still see more people going into that one than KR1M. By right, KR1M should be getting more customers than that store because it’s cheaper,” said the 32-year-old store assistant.

“Quality still matters. People don’t want rice that breaks apart when you cook it,” she said, repeating a common complaint about KR1M’s cheaper house brand rice.

Out of the 10 people who gave their views on KR1M’s quality, six said many of the house brands were inferior, while four said they were acceptable.

Consumer rights advocate Datuk Paul Selvaraj said a balance had to be struck between quality and price as KR1M was an effort to help low-income Malaysians.

“It’s also about educating consumers on value for money. Taste is subjective but as long as a food is safe enough to consume and it saves money, it should be okay. We should move away from being brand-conscious to what is value for money.”

However KR1M’s claim to offer lower prices has also been challenged. In February, Segambut MP Lim Lip Eng did a comparison of items sold in a KR1M outlet and a Tesco outlet and claimed that KR1M”s prices were higher.

Mydin managing director Datuk Ameer Ali Mydin had at the time refuted Lim’s findings, but Lim insisted his findings were correct. The lawmaker claimed KR1M only debunked one comparison in his list of items.

Reena, the shop assistant from Desa Mentari, said that she really wanted to support KR1M because it was a home-grown brand.

“But it has to really do better than the others if you really want us to shop there. Right now, it is difficult to fully support it.” – The Malaysian Insider