54% loss of income, 67% reduction in expenses: survey
Bangalore: The blockade has greatly affected consumers, forcing them to change their spending pattern.
A survey of Indian consumer sentiments conducted in the midst of the closure of management consulting firm McKinsey showed that 54% of people have seen a loss of income and 67% have reduced their spending.
Grocery, home supplies and home entertainment areas are the areas where consumers indicated they will continue to spend. Consumers are cutting back on non-essential items like clothing, accessories, footwear, alcohol, snacks, take-out and delivery, consumer electronics, personal care services, vehicle shopping, and out-of-home entertainment.
In the survey, conducted between April 10-13, 57% of respondents said they had witnessed a loss in household savings in the past two weeks, and 55% felt it would continue to lose for the next two weeks. But 58% feel the economy will recover stronger than before in 2-3 months compared to about 52% in a survey in late March.
The coronavirus outbreak will cause more changes in purchasing channels. Purchase of household items, groceries, personal care products, entertainment and media will expand online.
Sectors such as clothing, alcohol, tobacco, jewelry, and snacks are likely to focus offline. Before the shutdown began, a McKinsey report had shown a 40% increase in consumer spending at online grocery stores, outpacing traditional retail formats.
Only local kirana stores matched this increase in spending due to proximity to consumers amid the shutdown.