Middle and lower income families will spend 43 per cent less this festive season than last year due to inflated prices of daily food items, coupled with high education cost and grim job market scenario, says an Assocham survey.
The poll was conducted in October in major cities like Delhi, Mumbai, Kolkata, Chennai, Ahmedabad, Hyderabad, Pune, Chandigarh and Dehradun, among others.
It highlights the spending pattern of 1,650 respondents from diverse sectors like automobile, biotechnology, BFSI (banking, financial services and insurance), energy, fast moving consumer goods (FMCG), information technology (IT), pharmaceutical, real estate etc.
Over 67 per cent of Delhiites from the middle and lower income group families said the steep rise in the prices of daily food items, costly education, less job opportunities and salary packages shrinking over the last year will make their festive seasons dull this year.
Delhi ranks first in curtailing festive expenses, followed by Ahmedabad, Mumbai, Chandigarh, Kolkata and Chennai, respectively.
"Moreover, the rural demand has gone down by 48 per cent this year as compared to 2014 due to monsoon deficit, less employment avenues and low income," Assocham Secretary General D S Rawat said.
High inflation and an unstable economy may pull the consumer back from spending big during the festive season, the survey pointed out.
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 per cent 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," Rawat said.
About 56 per cent of the survey respondents said they plan to spend less amount on this festive season as the prices of food items have gone up, 21 per cent say that value of savings has gone down, 15 per cent say they are saving for a big purchase and around 8 per cent said EMIs have risen.
Over 65 per cent 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 per cent of the respondents will buy only on sale or discounts, 27 per cent will spend less on sweets, clothes etc, 12 per cent will buy fewer gifts, 5 per cent will buy recycled gifts and the rest 2 per cent will buy a group gift.
Besides, a small percentage of the respondents feel that festivals are the time to splurge, even as discounts remain the biggest attraction for most buyers.
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 per cent.