According to the EY Consumer Index 2023, which examines the spending habits of Romanians, 56% of Romanians say they will spend more during the holidays from December to January 2023 compared to last year. The study was conducted in December 2023 and highlights how the Romanian consumer’s perception and experience of buying and consuming has changed in the context of significant changes that have taken place this year at all economic, social and geopolitical levels around the world.

Georgiana Iancu, Partner, Head of Consumer Products and Retail, EY Romania, summarizes the findings of the EY Consumer Index: “According to an EY study conducted in December of this year, the three main problems for Romanians are the rising cost of living, the country’s economy and the outcome of political elections. Based on the analyzed answers, in addition to the increase in the prices of basic products, it is possible to identify other reasons for the concern of Romanians for the next year, namely: an increase in personal or household income tax, the state of citizens’ incomes and pension insurance. In the context of holiday spending, Romanians have a moderate appetite for campaigns with significant discounts. However, despite worries about their own finances, 56% of respondents say they will spend more during the holidays, December-January, compared to the previous year.” ,.

The five most important problems for Romanians are related to the rising cost of living (32%), the country’s economy (31%), the result of political elections (30%), wars and external conflicts (25%), and social unrest. and division in society (19%). This is evidence of concern about the domestic situation, but also about the impact of the new conflict in the Middle East on public opinion, in addition to the war in Ukraine. These aspects exceeded those related to mental health (20% of respondents) or personal finances (17%). At the opposite pole, Romanians worry less about family and community relationships (23%), the ability to meet their basic personal needs (17%), the workplace (13%), terrorist attacks (12%) or pandemics (10%). ).

Regarding expectations for the future, the answers were very diverse. Thus, in the section on expectations for the improvement of the current situation, personal finances (44%), workplace (37%), physical health and mental health (35%) are in the first places, opportunities to satisfy personal needs. (31%). At the opposite pole, expectations regarding the deterioration of the situation in the future are mainly related to: the increase in the cost of living (72%), the country’s economy (60%), the result of political elections in the country (59%). %), conflicts and wars (56%) and climate change (53%).

Consumer behavior appears to have undergone important changes amid a general increase in prices for most basic products and services. With the first three aspects that respondents agreed with the most are: trying not to waste food (80%), better analyzing the need to buy non-essential products (79%) and the fact that they do not feel the need to keep up with the latest fashion trends (61%). In addition, more than half of respondents (56%) indicated that they try to repair things rather than replace them, indicating a concern for saving money during difficult times, and for 45% of respondents, brands are not very important in the purchase decision . Almost half disagreed with the statement that they would tend to buy non-essential goods (fashion items, cosmetics, household items) because it makes them happy (45%).

“All these responses reaffirm the consumption habits of Romanians, which our team has already identified through the EY Consumer Index surveys conducted over the past 12 months. Thus, factors such as increased concern about not wasting food, repairing one’s own things through replacement, giving up non-essential purchases and saving clearly show us Romanians’ concern about the ever-increasing cost of living. These results are even more interesting when compared to the fact that the majority of those who participated in the study were people with higher education, higher than average income and living in an urban environment. Therefore, these concerns are expected to be much more acute for Romanians with less financial means.”– explains Georgiana Jancu, Partner, Head of Consumer Products and Retail at EY in Romania.

Economical shopping

The majority of survey participants say they are considering cutting back on fashion accessories (jewelry, handbags, sunglasses), 64%, followed by consumer electronics (smartwatches, phones, tablets, 54% and even household items). (household items or products, jewelry), with 51% of responses.

The main reason that makes Romanians buy less products in the future is saving money (80% of respondents), followed by lack of need (77%) and the fact that life could be simpler without these products.

When asked for which goods they would be willing to pay more in the future, the majority of respondents pointed to durable goods (72%) and high-quality products (71%), which also indicates a more responsible attitude towards consumption. On the other hand, they prefer to buy products made in Romania (49%), from trusted brands (42% of respondents) and from brands that promote health and well-being and support the community.

More attention to personal finances

The EY study referred to a number of important aspects of Romanians’ daily lives, from personal income, interest on loans, rent, personal debt, taxes, pensions, the cost of food, energy and fuel to job security, access to health care and their cost. Respondents are most concerned about five aspects: rising prices of food, energy and fuel (85%), increasing income tax (76%), the state of citizens’ incomes and pension insurance (66%), the ability to buy a house (61%) and having enough money to spend on things other than usual (61%). Respondents were also very concerned about the availability and cost of health care services, including those related to mental health or rising mortgage interest rates. They were less concerned about personal debt, separation from family or travel restrictions, aspects that have lost their importance compared to the pandemic and post-pandemic period.

When asked whether they will change their approach to household spending in the next 3-4 months, most respondents answered that they will spend the same amount as in the current period.

“Romanians are expected to seek greater moderation in spending and, more generally, in managing personal income in the context of rising prices, compounded by increased fees and taxes from 2024. The fact that spending decisions still stand can be interpreted as a threshold of maturity in managing family budgets to avoid unnecessary spending.” emphasizes Georgiana Iancu, Partner, Head of Consumer Products and Retail at EY Romania.

A mirage of reduced prices and holiday expenses

Although more than two-thirds (67%) of respondents said they waited for sales promotions (such as Black Friday) to make new purchases, only 50% said they participated in these events, with the majority (82%) buying online. In terms of amounts spent, 41% of respondents said they were spending the same amounts, 30% of respondents said more than the previous year, and the remaining 29% said less than the previous year.

When it comes to holiday spending, as well as holidays from December to January, the majority of respondents (56%) said they would spend more compared to last year, while 30% said they would spend at the same level.

In the conditions of rising prices, there is already a natural choice of buyers for products of own brands of large retailers. When asked which products they would buy private label products for, the majority of respondents (71%) ticked fresh food, followed by packaged foods (51%), home and care products (49%), clothing , shoes and accessories (36%) and personal hygiene products (32%). 64% of respondents believe that these products meet the requirements in terms of price and quality compared to branded goods and offer an opportunity to save. On the other hand, 58% have seen price increases for these products and found that some brands have reduced the size of the packages, although they have kept the price or even increased it (64%).

Consumption habits that will not change in the future

How would you expect to do the following in the future: more or less often than you do now? That’s the question in the EY survey, to which the majority of respondents said they wouldn’t change a thing: they would cook at home, entertain at home, order online and generally spend more time at home and with family (with weights between 54% and 66% for each from these options). The preference for visiting regular stores (60% of respondents) without giving up online orders (food and non-food products), which was chosen by 63% of respondents, can be considered a surprise.

The responses come amid the observation of the vast majority of EY survey participants that shelf prices have generally increased for all products, both branded and private label.

“In the case of Romanian consumers, we are talking about adapting to the new reality, that is, the constant increase in the cost of living, as well as the increase in taxes from 2024. Thus, habits of more frugal, even more sustainable consumption may be essential. the response of Romanian consumers in this economic context”, concludes Georgiana Iancu, partner, head of consumer goods and retail, EY Romania.

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About EY Romania

EY is one of the world’s largest professional services firms, with 395,442 employees in more than 700 offices in 150 countries and revenues of approximately $49.4 billion for the fiscal year ending June 30, 2023. Our network is globally integrated and its resources help us provide services for our customers to take advantage of opportunities around the world.

Present in Romania since 1992, EY provides, with the help of more than 1,000 employees in Romania and the Republic of Moldova, integrated audit services, tax, legal, strategic and transactional assistance, and advises multinational and local companies. We have offices in Bucharest, Cluj-Napoca, Timisoara, Iasi and Chisinau. In 2014, EY Romania joined the only global competition dedicated to entrepreneurship, EY Entrepreneur Of The Year. The winner of the local edition represents Romania in the world final, which takes place every June in Monte Carlo. In the global final, the title of World Entrepreneur Of The Year is awarded.

About research

EY Consumer Index 2023 was conducted in December 2023. The total number of respondents: 284. Age: more than half (52%) of the categories of respondents surveyed are aged 31 to 50, followed by young people aged 18 to 30 (35%) and the category of mature and elderly people (51 – 65 years and older) – 13% of the total number. Gender: men – 32%, women – 67%, N/A – 1%. Geographically: Bucharest – 69%, Ilfov – 6%, Arad, Arges, Bacau, Sibiu, Maramures – 1%. Cluj – 7%, Iasi – 3%, Timișoara – 4%, Prahova – 2%. The rest is less than 1%. Environment: city – 95%, rural area – 4%, N/A – 1%. University – 50%, graduate school – 47%, secondary education – 3%. Full-time employees – 90%, freelance – professionals – 7%, students, pensioners, part-time workers – 3% (total). Monthly income: below 2,999 – 4%, from 3,000 to 3,999 – 13%, from 4,000 to 4,999 – 14%, from 5,000 to 10,000 – 31%, from 10,000 to 15,000 – 19%, more than 15,000 – 19%.​​

Article supported by EY Romania