61 per cent consumers see their household income declining in the current financial year
Due to the severe impact of the COVID-19 pandemic and induced lockdown, a significant number of households across the country reported a decline in their earnings, due to major salary cuts or complete job loss. The overall consumer spending this year was much lower as compared to previous years, indicating a decline in savings and discretionary purchases. According to the bi-annual Mood of the Consumer Survey by LocalCircles, out of 8,240 responses, 68 per cent of consumers said their household savings declined in the last eight months during the COVID-19 pandemic.
The survey was conducted to assess consumers spending behaviour during the festive season, spending plans for the next four months, and the household’s expectation regarding earnings as well as savings situation by March 2021. According to the survey, one of the biggest takeaways is that 10 per cent of the respondents plan to spend over Rs 50,000 on discretionary purchases in the next four months while 21 per cent respondents plan to spend between Rs 10,000-50,000 in this period. This indicates good news for various sectors of the economy which registered a slowdown in consumer demand in the first six months of this financial year.
The survey received over 44,000 responses from consumers across 302 districts in the country. Out of them, 62 per cent respondents were men while 38 per cent were women. As many as 55 per cent respondents were from tier I, 26 per cent from tier II, and 19 per cent from tier III, IV and rural districts. However, almost 50 per cent of consumers have plans to spend on buying discretionary products or assets in the next four months.
Some of the key takeaways from the survey are as follows:
- 68 per cent of consumers said that their household saving declined in the last eight months during COVID-19 pandemic
- 66 per cent of consumers spent Rs1,000 or more during the festive season with consumer spending doing 10 per cent better than anticipated
- 10 per cent households expected to spend over Rs 50,000 in discretionary purchases in the next four months
- 48 per cent of consumers will make discretionary purchases in the next four months. The top areas of spending include home renovation, furnishings, travel and white goods
- 61 per cent consumers see their household income declining in the current financial year
- 15 per cent fewer households now expect their annual earnings to decline this year