High inflation may dampen festival season spending: study

According to Ipsos study more than 78% Indians claimed that their planned expenditure during this season was less than Rs 10,000

Indians may not be in the mood to spend during this festival season owing to the high inflation in the country. According to the 'Mood of the Nation Survey' conducted by global research firm Ipsos, more than a third (78%) Indians claimed that their planned expenditure during this festival season was less than Rs 10,000.

Among the respondents, about 43% individuals said that their spend during this Diwali was less than Rs 5,000. These people were mostly from middle and lower middle income families. "High inflation and an uncertain economic environment are some of the main reasons for buyers cutting down on spending," said Biswarup Banerjee, Head of Marketing Communication, Ipsos in India.

 

As per the survey, about 16% Indians said that their shopping budget during this Diwali was between Rs 20,000 to Rs 50,000. In this group, rich and higher middle class income families were significantly higher than middle and lower middle income families. Only 5% of rich Indians claimed that their planned expenditure during this Diwali was more than Rs 50,000.

In Delhi, 23% people said that their Diwali shopping budget was more than Rs 50,000 and 28% people claimed that their shopping budget was between Rs 20,000 to Rs 50,000. In Kolkata, it was found that 92% people had a Durga Puja shopping budget of less than Rs 10,000.

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, cam electronic goods desired to be purchased by 30% people.

Only half (52%) of the respondents said that they were holding up their purchase decision till Diwali in anticipation of heavy discounts. Delhi (79%) and Kolkata (69%) topped the list in terms of holding the purchase decision till festival season discounts were announced.

"This festive season bargain-hunting may become the preferred choice for majority of Indians as higher discounts will be definitely an added incentive for spending on desired items," added Banerjee.

The Ipsos survey was conducted between September 24-27, 2012 among 420 men and women in Delhi, Mumbai, Kolkata, Chennai, Bangalore and Lucknow.