High inflation has impacted consumption of both essentials and non-essentials, which continued to dip in the month of June, with overall household expenses showing the highest dip in the last three months.
According to Axis My India’s latest consumer sentiment index (CSI), a monthly analysis of consumer perception, showed that the overall household spending has increased for 59% of families, which reflects a 2% dip from the previous month. The report reveals that the consumption of both essentials and non-essentials continued to dip, a trend seen in the last three months.
The latest net CSI score, calculated by percentage increase minus percentage decrease in sentiment, is at +9, compared to +10 in the previous month, reflecting a very minor decrease by 1 point. Also, spends on essentials like personal care and household items remained the same for 37% of families, which is a rise of 4% from May. Spending, however, has increased for 44% of the families, which reflects a dip by 2% from May.
Spends on non-essential and discretionary products like air conditioners, cars and refrigerators remained the same for 88% of families, reflecting an increase of 2% over the previous month. Spends, however, have increased for only 6% of families, reflecting a slight dip of 2% from the previous month.
The rising trend of people going on vacations, shopping and eating out has also taken a dip in June. About 86% said that they are continuing to go out as much as earlier for short vacations, to malls and restaurants, a dip by 1% from May. Increased travel is reflected only among 7% of families, the same as the previous month.
The survey also found that 50% of consumers believe that petrol and diesel prices should be further reduced, while 16% are not at all satisfied. Conversely, 22% are aligned and happy with this reduced rate.
The survey was carried out with a sample size of 10,409 people across 35 states and Union territories. Of these, 70% belonged to rural India, while 30% were urban counterparts.
Commenting on the CSI report, Pradeep Gupta, chairman & MD, Axis My India, said, “Over time, consumer spending has reached a status quo bias where the keenness to increase consumption has been limited. This is mainly due to inflation and the after-effects of the pandemic, which has made it difficult for consumers to see their nominal incomes recover to pre-pandemic levels.”