The prices of some consumer goods, unlike the official consumption basket, have increased by some 20% this year, and this turned consumers into more cautious buyers, according to Eugen Saulea, founder of major distribution chain ESSA Group.

“The beginning of 2021 was marked by an insignificant increase in the minimum gross wage, of only 3.4%, while the area of ​​consumer goods registered increases of over 20%. This Easter, the traffic in stores was low, the shopping cart a small one,” Eugen Saulea said, quoted by Bursa.

He says that consumers are much more cautious and restrictive when it comes to impulsive shopping (making purchases not on their shopping list) and are very carefully seeking the best price and the best deals.

The findings reported by ESSA Group are consistent with the retail sales data: in Q1, food sales were up 0.1% in annual terms (but -2.1% YoY in March).

The stabilization in food consumption occurs after a robust surge at an average yearly rate of just over 9% over the previous five years.

The rising food prices (yet only +2.0% YoY in Jan-Apr) can hardly explain the stagnation, which is still unexpected, particularly given the subdued activity in the HoReCa sector.

The explanation should be searched in a broader change in the consumers’ behavior during a pandemic. Firstly, the flight to quality (upper-end segment of the market) in the case of those facing no financial hardships or the search for bargains in the case of those with budget constraints. Both ends of the market have flourished. 

(Photo: Wavebreakmedialtd./ Dreamstime)

iulian@romania-insider.com