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February 7, 2023
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McKinsey&Company: Inflation is the number-one concern of consumers in Romania

  • Romanians are among the most concerned people about rising prices in Europe
  • Consumers adapt to increasing uncertainty: 80% of them changed behaviors when shopping for groceries and essentials

Inflation is the main concern for two-thirds of consumers in Romania, followed by the invasion of Ukraine and healthcare costs, according to the “Consumer Sentiment Survey”, a study conducted by McKinsey&Company Romania in November this year.

The study covered three topics (how consumers feel, what they observe and how they react) and had approximately 1,000 respondents, aged 18+ and from all income categories.

Eighty-four percent of respondents say prices are among their top three concerns, while two-thirds say prices are their top concern. As a result, consumers are reallocating spending towards essential goods and value retailers such as discounters, hypermarkets and supermarkets.

“Romanian consumers are taking action to protect their households in the face of rising uncertainty, by prioritizing essential purchases and choosing value-for-money or cheaper products within categories. Companies who take time to understand how consumers are behaving will be able to support them accordingly”, says Alexandru Filip, Managing Partner McKinsey & Company Romania.

When compared to other European countries, Romanian consumers are the second-most concerned about inflation, after the United Kingdom. The least concerned by higher prices are the Italians (52%), the Spanish (53%), the French and the Germans (57%).

Surprisingly, those most worried about the effects of inflation in Romania are high-income earners and Baby Boomers (i.e., people born between 1946 and 1964), who are becoming more aware of the total impact on their personal and family budgets and want to protect themselves from the unexpected and maintain a sustainable lifestyle.

 

Millennials are mainly concerned about job security and Generation Z is about climate change

 

If inflation is the primary concern, the other two significant worries of Romanians are the invasion of Ukraine and the accessibility of healthcare.

The people most worried about the attacks in Ukraine are high-income earners and Baby Boom Boomers (i.e., people born between 1946 and 1964), and access to healthcare is a concern for low-income and Baby Boom Romanians.

Job security is a significant element of stress for Millennials (i.e., people born between 1981 and 1996), and climate change is a considerable concern for Generation Z (i.e., people born between 1997 and 2012, over 18 years old), and for high-income earners.

 

 30% of consumers have recently changed the store from which they used to purchase

 

At the same time, most respondents expect the prices of essential products to increase throughout the following year.

Thus, in the last 4-6 weeks, 80% of Romanian consumers have changed their behavior when buying food and essential products, for example, they chose cheaper household products or the retailer’s own brand. Romanians chose cheaper or own-brand brands, especially for household products (77%), snacks and sweets (71%), frozen food (70%), dairy and eggs (67%).

At the same time, 30% of consumers changed their store/retailer in the last 4-6 weeks, with no winning format as consumers are decreasing spending across all channels. Those who did so were driven by the promise of better prices (35%) and gasoline savings (18%). A further 22% said they switched to get better value for money or better quality.

Consumers shop less in higher-price convenience and specialty grocery stores, preferring supermarkets, hypermarkets and discounters as people started to trade off comfort for price.

Discount stores have the most loyal consumers (just 28% of clients shopped less), but they need geographical spread – 28% of consumers never bought from a discounter.

The most affected by the new shopping behaviors are the specialty grocery stores, as 41% of clients shopped less during the last 4-6 weeks.

The full report is available here.

 

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