Indians are cutting back on non-essential spending, says PwC survey

New Delhi: Nearly two-thirds (63%) Indians are cutting back on non-essential purchases to provision more money to spend on daily essentials, according to India-specific findings of a PwC survey.

“Consumers globally are weighed down by concerns around cost of living and personal finances. Around 74% of Indian respondents say they are concerned about their personal finance situation, as opposed to 50% globally. 63% of Indian consumers are cutting back non-essential spending altogether,” according to the 2023 PwC Global Consumer Insights Pulse Survey released Thursday.

The survey received responses from 9,180 consumers across 25 territories. In India, the survey included 500 respondents across 12 metros, tier-1 and tier-2 cities of the country. Of these, 57% of respondents were male and 43% were female. The survey was conducted from 24 October to 16 November 2022.

Most Indians said that were likely to budget expenses for luxury and premium products, travel, and fashion while maintaining spends on groceries. Overall, inflation has hurt consumer demand as prices of fuel to household essentials surged in the last year. This has left little room to spend more on discretionary items.

“The survey also found most Indian consumers are expecting to reduce their expenditure across all surveyed categories over the next six months, a significant decline in planned spend across all categories since the previous pulse survey in June 2022. Industries, including luxury and premium products, travel, and fashion, expect to see the greatest portion of consumer spend reductions over the next six months, whereas the groceries segment is expected to decline the least,” PwC said.

This sentiment will have a potential restraining effect on spends in highly discretionary categories of electronics and luxury, said Ravi Kapoor, Partner and Leader, Retail & Consumer, PwC India.

“Consumers will continue to demand world-class buying experiences in both physical and digital channels with work cut out for brands to reduce costs, enhance availability, and for ‘going local’. The silver lining here remains the unequivocal growths in adoption of digital channels and the desire to spend more on travel in the coming months,” Kapoor said.

Globally, almost half of those surveyed said they opt for certain products when on offer or promotion, 44% are looking at retailers offering better value, 38% are using comparison sites to find cheaper alternatives, 36% are buying in bulk to save cost, and 33% are buying retailers’ personal brands for better savings.

Half of the Indian consumers (50%) said rising prices remain the most frequently experienced issue when shopping in-store, supply chain issues also dominate with larger queues and busier store locations (35%), along with product availability (28%), which is also impacting consumer behaviour.