braking time slows down the mood to buy in Austria – mnews – medianet kunden.at
VIENNA. At least since the beginning of the Covid-19 pandemic, the global supply chains have been strained and are now being additionally burdened by the war in Ukraine. The economic consequences of the war also bring higher electricity, gas and petrol costs as well as rising prices for food and consumer goods. The resulting increase in spending per household also influences the further shopping behavior of Austrians. Even if the prices for consumer goods such as clothing, jewelery and electrical appliances have not risen as sharply in recent weeks and months as those for energy and food, the mood to buy in Austria is gloomy – this is shown by the analysis by Strategy&, PwC’s strategy consultancy and from PwC Austria, on the economic impact of the war in Ukraine on the non-food sector.
According to the representative survey, in which around 1,100 Austrians between the ages of 18 and 65 were interviewed in April 2022, the price development IS viewed with great concern: 75% of domestic consumers are concerned or even very concerned about the current increases. Customers are increasingly looking for inexpensive products or are doing without non-essential purchases entirely in order to compensate for the new level of living costs.
“Due to the higher cost of living, many households will forgo purchases that are not absolutely necessary. 46 percent of Austrians state that planned spending on travel and catering influences their spending on other consumer goods. This applies in particular to durable consumer goods that are not primarily used for replacement, such as furniture or certain electronic items. When it comes to clothing, jewelery and shoes, too, we expect a clear restraint, a restriction to what is necessary and a switch to cheaper products and brands,” says Gerald Dipplinger, Partner at PwC Austria, summarizing the current situation.
Subjectively, customers perceive price increases across almost all product categories – they notice very strong price increases, especially for sporting goods and products in the “DIY and garden” area. Furniture and health and beauty products have also become much more expensive in their perception since the beginning of the year.
Fashion, watches and jewellery: consumers use savings potential
Because pre-orders and long-term contracts are common practice in the fashion sector, costs are currently rising more slowly here. In the long term, however, a price increase due to higher production and transport costs is to be expected. 61% have already noticed a price increase and are adapting accordingly: 27% are increasingly looking online for cheap products and using additional tools such as price comparison portals; in brick-and-mortar retail it is 21%. Special offers and reduced goods are also popular. Almost a fifth of the decision-makers (18%), on the other hand, consciously choose quality over quantity and also accept a higher price for it. Fashion items from major brands continue to be popular, but are increasingly being purchased from second-hand stores due to further savings potential.
Purchases of watches and jewelery are also declining: more than a third of customers (36%) are postponing their purchase. A similar picture applies to furniture and electrical appliances as well as larger sporting goods. When it comes to health and beauty products and services, 24% of the increased products are on sale or shop online and local for preferred prices.
Shift in priorities: sustainability aspects are becoming less important
Rising costs are leading consumers to be more thoughtful about their purchases. There is currently a shift in priorities: for almost a third of the population (30%), sustainability aspects are currently losing importance compared to higher prices. “Due to rising prices, around a third of domestic consumers consciously opt for cheaper products, even if they are less sustainable. In Austria, however, a growing awareness of one’s own consumption is particularly evident in the older target group: Despite inflation, sustainability aspects are still part of the purchasing decision for 34% of 45 to 54 year olds. While currently only 13% of all tend to want to buy second-hand products in the clothing and shoe sector, this segment could play a greater role in the future, especially for younger target groups,” analyzes Willibald Kofler, Country Head of Strategy& Austria. “A development that should be considered, especially for the future.”
If prices continue to rise: Greatly reduced expenses in Austria
Should the price spiral continue to develop upwards, half of the consumers (49.5%) plan to reduce their spending in all product categories; almost 30% want to switch to cheaper alternatives. Loans or installment payments have so far only been an option for a minority to make purchases in the non-food sector despite rising prices. A loan with good interest rates is only an option for four percent, and three percent rely on paying in installments. (red)
The full analysis is available upon request or at:
https://www.strategyand.pwc.com/at/verbrauchentenbefragung-non-food.html