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With the country grappling with record-high inflation, Indian consumers cut back on spending in a big way. According to the Deloitte Touche Tohmatsu India report released on Wednesday, there was an 18 per cent decrease in both discretionary and non-discretionary spending by Indian consumers. “This decrease suggests a change in consumer behaviour as consumers prepare themselves for the possibility of financial instability in the future,” noted the report.
According to the recent analysis done by Deloitte, consumer perception towards travel has witnessed a fall in the proportion of people willing to fly or stay in hotels. This trend can especially be noticed among individuals travelling for business purposes, where the percentage declined by 3 per cent since the previous analysis done by the consultancy firm.
Young people save
According to the report, respondents between the ages of 18-54 were more concerned about saving for the future; meanwhile, respondents 55 years and older, are looking for new opportunities to enjoy life. Deloitte noted that there has been an overall 20 per cent increase in expenditure on leisure activities in this age group.
However, despite inflation worsening, the percentage of respondents who are optimistic about the financial situation improving in the next three years has remained stable since December 2021 at approximately 77 per cent.
Indians become introspective
Commenting on the latest trends of Global State of Consumer Tracker, Porus Doctor, Partner and Consumer Industry leader, Deloitte Touche Tohmatsu India LLP, said: “Inflationary trends, along with rising fuel and commodity prices and a weak rupee, have driven the Indian consumer to become more circumspect and introspective, and focus on prioritising one’s own well-being (23 per cent) and purpose (20 per cent) compared with 12 months ago.”
The Indian economy is gripped by unprecedented inflation. According to official data, the annual inflation rate in India increased to 6.95 per cent in March 2022, the highest since October of 2020. Similarly, the wholesale price index in March at 14.5 per cent, was the second-highest since 2012.
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