After Covid freeze, people are shopping with a vengeance

A Shot In The Arm

After Covid freeze, people are shopping with a vengeance

Namrata.Singh@timesgroup.com

15.12.2020

It’s not merely pent-up demand that's lifting the Indian economy. Green shoots are visible in certain parts across industries. While 30 of the 48 high-frequency economic indicators tracked by the Reserve Bank of India have returned to pre-Covid levels, some, such as passenger vehicle and two-wheeler sales, and insurance premiums, have also shown an uptick.

The recovery in oil consumption and steel production shows increasing demand from construction, infrastructure, automobiles and consumer durables.

Call it ‘revenge buying’, but what’s aiding the recovery process is consumers buying not just the essentials but also apparel, jewellery, crockery and gourmet foods. They are spending on dining out as well.

“Consumers have had enough,” said Pinakiranjan Mishra, partner and leader, consumer products and retail, EY India, “Many haven’t spent money on eating out, shopping or vacations in the last nine months, so there’s a kind of saving they have made. There is frustration and desire to at least enjoy a bit of shopping and travelling with due care.”

Some homestays are fully occupied, said Mishra, while adding that travel is mainly for leisure at present.

Devendra Chawla, CEO, Spencer’s Retail & Nature’s Basket, said, “Footfall is inching up by the day, and it's equal to the number of bills as consumers now venture out when they are sure they will shop.” Although the number of monthly mall trips has come down, the average bill value per trip is 15-20% higher than last year, said Chawla.

In the early months of the pandemic, consumers stocked up the pantry with large packs, but later shifted to small packs from neighborhood stores. Now, large packs are back in demand. According to Kantar, post-Covid volumes have grown in squashes and powders, talcs, sauces and ketchups, bottled soft drinks, jams and feminine hygiene. Almost all these categories had slowed down or declined at the start of the pandemic.

Smaller towns (under 1 lakh population) increased the purchase for 33 categories and metros for 26 categories. “The increase is pronounced in smaller towns and lower SECs, which had perhaps cut down on their purchases sharply,” said K Ramakrishnan, MD-South Asia, Worldpanel Division, Kantar.

In a recent survey by community social media platform LocalCircles, with more than 15,000 responses in 303 districts, 18% of households said they spent significantly more than what they needed to after stores and malls opened.

Retail channel checks by Edelweiss Securities show the recovery has continued after the festive season, driven by demand from weddings and categories like winter wear, jewellery and apparel.

Edelweiss said recovery for quick service restaurants continues as dining in has been permitted in major metro cities. Dine-in is now at roughly 50% of pre-Covid levels while deliveries have already exceeded 100%.

A study conducted jointly by Payback and Unomer shows the preference for party-wear grew 41%, followed by 16% for semi-formal and formal wear. Home decor has seen 44% improvement with 27% consumers saying they have bought, and 39% saying they are planning to buy.

While things already look better, Mishra at EY says, “The real revenge shopping will happen when the vaccine is out.”