Crisis leads to shift in consumer spending patterns
Back in pre-crisis times friends used to ask each other questions like ?Which bar/restaurant/club shall we go to tonight?? Nowadays however the question is more likely to be something along the lines of ?Whose house are we going to hang out at tonight??
The financial crisis has led to a dramatic drop in disposable incomes, which in turn has forced Greeks to seek out cheaper forms of entertainment, a popular choice being house gatherings, which favor the purchase of goods linked to domestic consumption.
The need to spend less has also led consumers to rediscover seamstresses and cobblers, as well as stores specializing in bicycle sales and repairs. While new consumer habits are driving a number of sectors into despair, they are also providing certain development opportunities in others.
Sales of ?smart? coffee machines that use special capsules (launched in the local market at the end of 2010) are currently rising by over 20 percent, suggesting that Greek consumers are less willing to fork out for pricey beverages from cafes. Meanwhile, more people are buying barbecue grills, pointing to a rising interest in eating and entertaining at home.
At the same time, a number of traditional sectors which prior to the crisis were in relative decline are now on the road to recovery. According to a recent survey conducted by the Chamber of Small and Medium-Sized Industries of Thessaloniki, the 2011 turnover of businesses operating in the fields of garment alterations, shoe repairs and sales and repairs of bicycles remained unaltered or in some cases went up, compared to the previous year. This is because consumers have begun to repair their clothes and shoes instead of buying new ones, while the high cost of maintaining a car has led many to start using bicycles.
Another three sectors have shown particular resistance in the current climate: accounting, information services and data processing activities. According to recent figures published by the Hellenic Statistical Authority (ELSTAT), turnover in 2011 rose by 5.4 percent at accountants? offices, 6.8 percent in information services, and 23.1 percent in data processing activities, compared to 2010.
At the other end of the spectrum, however, are products which are being increasingly shunned due to the drop in consumer spending. In this case, the figures from a recent survey conducted by the Boston Consulting Group (BCG) are quite telling: The majority of survey participants (88 percent) stated they would be spending less on alcoholic beverages, while mobile phone services (78 percent), jewelry and accessories (77 percent) and cars (60 percent) represent other categories negatively affected by the changing spending patterns.
Another sector which has been hit is organic farming production. While in the pre-crisis period purchases of organic products were on the rise, the BCG survey showed that a considerable portion of consumers are now less willing to pay extra for such products. In the first quarter of 2011, 49 percent of respondents stated they were planning on spending less on organic products; the figure had risen to 75 percent by the end of the year.
Two areas in which Greek consumers appear unwilling to cut spending are baby foods and unprocessed foods. According to the BCG survey, only 16 percent of respondents said they were planning on spending less on baby food, while a noteworthy 10 percent claimed they were going to spend more money in this category, compared to the beginning of 2011.
In the unprocessed foods category, 84 percent of respondents stated they expected to spend the same amount, if not more, on such products.
The stamina displayed by this particular sector of the economy is associated with its fairly low prices, compared to those of standardized products.
