Urban consumers avoid cutting lifestyle

spending: IMRB study

Average monthly expenditure of households up by 14% in 2014 on higher costs of goods,
increased spending on segments like education, says study. The share of household
expenditure on food and groceries fell to 36% in 2014 from 40% in the previous year,
leaving consumers with more money to spend on non-food essentials. Photo: Mint

The share of households monthly spending on personal care products and household items held
steady in 2014, and the share of education went up by 6 percentage points, showing that urban
consumers remain in pursuit of an aspirational lifestyle, according to a study by market
researcher IMRB International.
Average monthly spending went up by 14% in 2014, on higher costs of goods and increased
expenditure on categories such as education, according to the Wallet Monitor study, which
covered 36,000 households in 190 cities. In line with the trend that emerged in 2013, the share of
household expenditure on food and groceries fell to 36% in 2014 from 40% in the previous year,
leaving consumers with more money to spend on non-food essentials.
The study suggested that urban consumers refrained from cutting back on lifestyle spending in
2014, with the share of expenditure on entertainment and eating out holding steady, although the
frequency of such consumption dipped. Priorities remained clear, said Deepa Mathew, group
business director at IMRB International. They dont want to compromise on an aspirational
lifestyle.
On average, the total household expenditure of consumers targeted by the IMRB study increased
by 29% between 2010 and 2013. Incomes rose by 46% in 2010-2014, the study said.
Despite rising costs, consumers were not willing to sacrifice spending on goods that they have
become accustomed to, said Mathew. The share of spending on household products dipped only
slightly from 6% to 5%. Growth in personal-care spending held steady at 5%.
Bhavna Chaturvedi, 35, a Delhi-based homemaker, found newer ways to stretch her budget.
Weve started consuming cheaper variants of packaged rice for the house and even curbed

spends on certain toiletries, said Chaturvedi, who saw the cost of her childs education rise by
10%.
Her family now either watches a movie together or eats out. We avoid clubbing the two. Its a
conscious decision, the taxes are only spiralling, she said.
Spending on non-food items has been rising steadily year-on-year, emulating consumption
patterns in more developed markets. Its a natural progression, said an executive at a top
retailer, who was not authorized to speak to the media. Once your basic needs are fulfilled, you
will look at spending more on other items. The executive predicted that over the next five years,
spending on leisure, services and healthcare will grow faster than expenditure on food and
groceries.
The proportion of consumers eating out at restaurants at least once in an month fell from 22% in
2013 to 18% in 2014. Even the percentage of consumers visiting fast food restaurants declined
from 34% in 2013 to 30% in 2014.
Education seemed to garner the highest share of the wallet. Overall spending on education
increased by 61%.
Average inflation in 2014 cooled to 6.37%, down from 10.92% in the year-ago period.
The report comes at a time when news of a weak monsoon has rattled consumer firms, which are
concerned about a slump in rural consumption.
According to a 6 April report by Mumbai-based brokerage Edelweiss Securities, growth in
coming quarters will be more volume-led as firms pass on some benefits of benign raw-material
prices to consumers.
The research for Wallet Monitor was conducted at the end of 2014 across 18 states. Housewives
aged 25-55, across socio-economic categories, were interviewed for the study.