Friday, July 1, 2022

Consumers reduce costs on fuel, clothing: survey


Over the past six months, urban Indian consumers have reduced spending on clothing, fuel and food as inflation has reduced household budgets, according to a YouGov survey.

The majority of urban Indians said that the cost of living has gone up slightly compared to 12 months ago due to rising prices of daily necessities. Of the 1,013 urban voters who cast their ballots online between June 7-10, 46% said their living expenses had increased “a lot” compared to 12 months ago, while 33% said it had increased “slightly”.

“While inflation has been at an all-time high for the last eight years, with rising petrol prices and wholesale price inflation hitting a 30-year high, the cost of living in India has risen in recent times,” YouGov said.

Retail inflation, measured by the Consumer Price Index (CPI), rose to an eight-year high of 7.79% in April, before it cooled to 7.04% in May. As a result, families are cutting back on expenses they feel are unnecessary.

Consumers in tier I cities are experiencing more effects, with half of them claiming that their living costs have increased significantly compared to 44% and 43% of residents in tier II and III cities, respectively.

Clothing tops the list of clothing, with more than a third saying they have reduced spending on clothing and accessories. Nearly many (31%) have reduced their spending on leisure activities such as hobbies or going to the movies.

Due to the recent rise in fuel prices, 29% have claimed to have reduced spending on petrol or diesel, while 28% have reduced costs on eating out.

This behavior is more pronounced in Tier I cities than in other cities, the survey found.

About a quarter of people have reduced spending on streaming services, but this is significantly higher in tier I cities where 32% have claimed so in the last six months.

However, consumers continued to spend on various categories such as essential food, food delivery, home broadband subscriptions, insurance, alcohol and tobacco, and monthly mobile phone bills.

Less cutbacks have been reported on essential foods (12%), broadband subscriptions (15%) and household necessities (18%), perhaps because they are more necessary, according to survey findings.

However, two out of five urban Indians expect their home situation to improve in the next 12 months. One-third (32%) do not expect any change and only 17% think it will get worse.

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