In spite of being considered recession-proof, the food and grocery retailing sector could not insulate itself from the ongoing slowdown in the country as shoppers reduced grocery budgets and curbed impulse shopping to save cash, according to a recent survey on grocery shopping.
The Indian economy’s growth rate dropped to 6.7 per cent in 2008-09 from 9 per cent the year before and from above 9 per cent levels in the years before that. This was reflected in the way shoppers curbed spending in the form of downtrading and deferred buying of big-ticket items, such as furniture and automobiles. Even now, the economy is expected to grow between 5-7 per cent only in the current fiscal.
A fifth of the respondents in the study, titled ‘Grocery Shopping Survey’, in Mumbai and Delhi said they have reduced their shopping budgets, while over 40 per cent of the shoppers in Mumbai said they have cut their impulse purchases.
“The recession has had a definite impact on grocery shopping, although perhaps to a lesser extent than areas such as ‘non-essential’ shopping — department store, apparel, travel, leisure, luxury, etc,” Sandeep Mittal, managing director of Cartesian Consulting, which conducted the survey, said.
India’s retail market is estimated at $350 billion and organised retail is estimated to account for 5 per cent of that. According to estimates, Indian retailing is expected to have a growth rate of 30-35 per cent this year against the earlier rate of 50 per cent in 2007-08.
The survey said that more number of shoppers are shedding their brand loyalty. Nearly 47 per cent of respondents said they have switched to brands that were giving better deals.
Grocery shoppers are also seeking more value in their shopping. About 75 per cent of respondents said that they have changed pack sizes they buy. “Either they have switched to larger pack sizes for greater economy, or to smaller pack sizes to minimise absolute outflow,” it said.
