Discretionary categories see revival as spending intent grows: Deloitte Survey

The higher spending on non-essential products is fuelled by the fall in consumer anxiety on account of the pandemic.

Consumers are showing an increased intent to spend on discretionary categories such as apparel, alcohol, footwear, furnishings as festivals approach and the new COVID-19 cases subside gradually, says Deloitte Global State of Consumer Tracker. According to the recent survey, about 12 percent of the respondents indicated they were spending on alcohol, 36 percent on apparel and footwear, 33 percent on electronics, 25 percent on furnishings, and 22 percent on restaurants.

The higher spending on non-essential products is fuelled by the fall in consumer anxiety on account of the pandemic. As per the tracker, 57 percent of respondents indicated during the current wave that they plan to delay their large purchases as compared to 62 percent in the first wave.

“If you look six months back, consumers were very anxious and the fear of the third wave was looming large,” said Sanjesh Thakur, partner, Deloitte India. “However, despite predictions, the third wave has not struck the country and if the situation remains the same, then most consumer goods categories will see strong festive sales,” he added.

Categories such as apparel and footwear are particularly going to witness a surge in demand, said Thakur, given the fact that consumers have not shopped for a while.

A recent survey by the Retailers Association of India (RAI) had also reported a recovery in retail sales across the country. The retail sales in India recovered to as much as 88 percent of the pre-pandemic levels in the country aided by festive shopping, said RAI survey. The findings of the survey showed that retail businesses in North and South India are almost back to the pre-pandemic levels in August 2021 with sales at 98 percent and 97 percent (of the pre-Covid times), respectively. West and East of India are looking hopeful of recovery in the next few months with current sales at 76 percent and 81 percent of pre-pandemic levels (August 2019).

According to Thakur, the resurgence in demand during the festive sales is going to aid online as well as offline retailers as consumers adopt an omnichannel approach to shopping. Similarly, backed by a strong monsoon, rural as well as urban India will witness strong growth in demand this festive season, he said.