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New Delhi: Urban Indian consumers cut back spending on apparel, fuel and eating out over the last six months as inflation ate into household budgets, according to the findings of a survey by YouGov.

A majority of urban Indians said their cost of living has gone up to some extent as compared to 12 months ago as inflation drove up prices of daily essentials. Meanwhile, 46% of those surveyed said their cost of living has gone up “a lot" compared to 12 months ago.

“With inflation at its highest level in the past eight years, petrol prices spiraling and wholesale price inflation at a 30-year high, cost of living in India has gone up in the recent past," YouGov said in a survey released Thursday.

YouGov surveyed 1,013 urban respondents online in India between 7 June and 10 June, 2022 using YouGov’s panel of over 20 million people worldwide.

For three in ten urban Indians, cost of living has gone up a little, according to findings of the survey released on Thursday.

Inflation is biting into household budgets across the globe. In India, it isn’t any different where inflation metrics have continued to be on the boil.

Retail inflation measured by the consumer price index (CPI) grew sharply to 7.79% in April. CPI jumped to 7.79% in April compared to 6.95% in March while food inflation jumped to 8.38% from 7.68% in March, according to government data released in June.

As a result, households are crimping back on spends they deem unnecessary.

In fact, consumers in tier-1 cities are more likely to feel a greater impact on their cost of living with half of them claiming their cost of living has gone up a lot, as compared to 44% and 43% residents in tier-2 and tier-3 cities who said the same about their situation, according to the findings of the survey.

Clothing topped the list with more than a third saying they have reduced spends on apparels and accessories. Almost as many (31%) have reduced their spending on hobbies or leisure activities like going to the cinema. With the recent increase in fuel prices, 29% claim to have cut their expenses on petrol or diesel; while 28% have decreased their spends on eating out.

This behavior is more pronounced in tier-1 cities than the rest of the cities in India, the survey findings revealed.

Around a quarter have cut down expenses on streaming services, but this is notably higher in tier-1 cities where 32% have claimed to do so in the last six months.

However, consumers continued to hold on to spends on various categories such as essential food items, food deliveries, home broadband subscriptions, insurance, alcohol and tobacco and monthly mobile phone bills.

Comparatively, lesser cutbacks have been reported on staple essential food items (12%), broadband subscriptions (15%) and household essentials (18%), perhaps because this is more of a necessity than a luxury, according to the survey findings.

However, two in five urban Indians expect their household situation to improve in the next 12 months. The positive sentiment is likely to carry forward in the future as two in five urban Indians (40%) expect their household situation to become better in the upcoming 12 months. A third (32%) expect no change and only 17% think it will become worse in the future.

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