Lockdown impact: 54% face loss in income, 67% cut spending

The lockdown has hit consumers hard, forcing them to change their spending pattern. A survey on Indian consumer sentiments conducted amid the lockdown by management consulting firm McKinsey showed that 54% people have seen a loss in income and 67% have cut back on their spending.

Grocery, household supplies, and at-home entertainment areas are the areas where consumers indicated they are going to continue spending. Consumers are cutting back their spending on non-essentials like apparel, accessories, footwear, alcohol, snacks, food-takeout & delivery, consumer electronics, personal care services, vehicle-purchase, and out-of-home entertainment.

In the survey, conducted between April 10 and 13, 57% respondents said they had witnessed a loss in household savings in the past two weeks and 55% felt they will continue to lose out for the next two weeks. But 58% feel the economy will bounce back stronger than before in 2-3 months compared to about 52% in a March-end survey.

The coronavirus outbreak will cause further change in the channels of shopping. Purchase of household supplies, grocery, personal-care products, entertainment and media will expand online.

Some sectors like apparel, alcohol, tobacco, jewellery and snacks are likely to be offlinefocused. Before the lockdown started, a McKinsey report had shown a 40% rise in consumer spend at online grocers, surpassing traditional retail formats. Only local kirana shops matched this rise in spend due to proximity to consumers amid the lockdown.

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