The study by a leading community social media platform LocalCircles said that almost 10% households expect to spend over Rs 50,000 in discretionary purchases in the next four months. While earnings and savings are expected to be lower in 2020-21 for over 60% households, the economic recovery is driving improvement in consumer sentiment, it said.
Around 21% households plan to spend between Rs 10,000 to Rs 50,000 in this period. This would mean good news for many sectors of the economy who saw slowdown in consumer demand in the first six months of FY 20-21, the study noted.
“Demand in sectors like travel, tourism, home renovation and repairs took a significant hit during this period as many remained locked in houses and were reluctant to get any home renovation work done due to the fear of the virus. Similarly, most families did not undertake travel by air, train or road due to lockdowns and spread of COVID-19,” the study said.
In fact, LocalCircles study said 66% of consumers spent Rs 1,000 or more during the festive season with consumer spending surging 10% higher than anticipated. The study covered over 44,000 responses from 302 districts of the country.
With the economic recovery seen in the last three months, there is clearly a rise in optimism and 15% fewer households now expect their 20-21 earnings to decline in comparison to last year, as per the report.
The study said with the reduction of uncertainty about the future, many consumers are now confident that though this year has been impacted, they haven’t lost their job and things are getting back on track with their business or employer’s business, and they will likely see their earnings increase or go back to previous year levels.