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Urban India holds onto its aspirations

News, 06 May 2015

NEW DELHI: Urban Indian households have cut back on grocery spending as they reassess their expenditure in order to find ways of maintaining an aspirational lifestyle.

The Wallet Monitor study from market researcher IMRB International interviewed housewives aged 25 to 55, covering 36,000 households in 190 cities, and found that for most categories the share of expenditure had remained steady from 2013 to 2014.

But the share of household expenditure on food and groceries had declined from 40% to 36%, and that of household products had dipped from 6% to 5%, leaving them with more to spend in other areas.

Much of that was going on education, however, where the share of spending had leapt from 15% to 21%.

At the same time "lifestyle" spending on entertainment and eating out held steady at 4%, as did that on personal care at 5%. This, said Deepa Mathew, group business director at IMRB International, was indicative of their attitude.

"Priorities remained clear," she told Live Mint. "They don't want to compromise on an aspirational lifestyle."

Some consumers reported buying cheaper brands in order to make their budgets go further, and while they continued to eat out and go to the cinema they were doing so less often than before.

The proportion eating out at restaurants at least once a month, for example, fell from 22% in 2013 to 18% in 2014. A similar decline was evident at fast food outlets, where the proportion had fallen from 34% to 30%.

These figures are reflected in the performance of international restaurant brands which have struggled to maintain sales growth and have turned to discounts to attract customers.

In general, expenditure on non-food items has been rising every year as incomes have grown – by 46% between 2010 and 2014 – leaving more to spend after meeting basic needs.

One leading retailer expected that spending on categories such as leisure, services and healthcare would grow faster than that on food and groceries over the next five years.

Data sourced from Live Mint; additional content by Warc staff