Thanks to high prices of daily food items, coupled with education cost and grim job market scenario, middle and lower income families to spend less by 43 per cent this festive season than last year, reveals the ASSOCHAM latest survey.
The survey was carried in the month of October in major places like Delhi, Mumbai, Kolkata, Chennai, Ahemdabad, Hyderabad, Pune, Chandigarh, Dehradun among other cities.
Over 67% of Delhiites from the middle and lower income group families said that steep rise in the prices of daily food items, costly education, less opportunity of jobs and salary packages shrinking over the last year will make their festive seasons dull this year.
In curtailing festive spend their expenses, Delhi ranks first followed by Ahmedabad (second), Mumbai (third) Chandigarh (fourth), Kolkata (fifth) and Chennai (sixth), adds the survey.
The rural demand has gone down by 48% this year compared to the last year due to deficit of monsoon, less opportunity of jobs and low income, says Mr. Rawat. High inflation and an unstable economy may pull the consumer back from spending big during the festive season, reveals the survey.
Last year, middle and lower middle income families spent nearly half of their salary on Diwali for shopping, sweets, gifting etc. This year, majority of middle and lower families in the country will be forced to slash their festive spend by 43% this festive season than the last year mainly because of persistently rising prices of food items. They have slashed their festive budget to meet first their monthly expenses, the report reveals.
According to survey, about 56% of respondents said that they plan to spend less amount on this festive seasons as the prices of food items have gone up, 21% say that value of saving has gone down, while around 15% say that they are saving for big purchase and around 8% said that EMIs have increased.
Over 65% of the respondents said that if they plan to spend, it will only be in case there are high discount offers. Most of the respondents plan to cut down on personal expenses or go bargain hunting to keep their festive budgets in control. Over 54% of the respondents will buy only on sale or discounts, 27% will spend less on sweets, clothes etc, 12% will buy fewer gifts, 5% will buy recycle gifts and the rest 2% will buy a group gift.
Only a small percentage feels that festivals are the time to splurge, even as discounts remain the biggest attraction for most buyers. Over 61% of the respondents said that if they plan to spend higher discounts will be the incentives for them, adds the survey.
"This year, Pulses, edible oil, milk, butter, sugar, dry- fruits, flour and labour charges everything that goes into making an irresistible sweet has turned dearer. So, everybody is feeling the pinch of rising cost of every commodity", said Mr. D S Rawat, Secretary General ASSOCHAM.
Majority of the respondent said that monthly grocery bills have also jumped to about Rs 6,500 to 8,000, compared to Rs 5,500 in the last two years an increase of 50%.
Majority of them look for, discount up to 50%, 29% look for buy one, get one free offer, 15% look for the offer of buy two for the price of one, just 5% nearly spend Rs. 5,000 to get a gift worth Rs. 500, reveals the survey.
On an average, only 42 per cent of the respondents intend to buy mobiles, digital products, home appliances, electronics or automobiles, with consumers in the mega metros more likely to make the purchase compared to the rest. Young consumers are more likely to buy these categories, with 59 per cent of respondents between 25 - 34 years expected to buy mobile phones compared to 48 per cent in age group 35 to 45 years.
The survey said that during this festival season, sweets and food items (90%), clothes (86%), and gifts (53%) were the top three planned purchases of Indian citizen. After these, electronic goods desired to be purchased by 30% people.