GST rate cuts to ease household costs: PwC
What's the story
The recent revision of Goods and Services Tax (GST) rates is likely to provide some relief to household budgets across India, according to a report by PwC. The advisory firm believes that these rate adjustments will make daily expenses more manageable for consumers. This could potentially boost overall consumption sentiment in the country.
Consumer behavior
Changing consumer behavior
The PwC report highlights that a majority of consumers (63%) are worried about rising food prices. To combat inflation, many have adopted bulk buying or even home gardening. Almost half of these consumers have changed their shopping habits, looking for deals at different stores or discount outlets. While the revised GST rates are expected to provide some relief, these consumer behaviors are primarily responses to rising food prices and inflation, rather than direct results of the GST changes.
Food preferences
Traditional foods still a priority
Despite the economic challenges, many consumers still prioritize traditional foods. The PwC report found that 74% of respondents said their food choices are deeply rooted in cultural heritage and longstanding traditions. This indicates that brands offering functional heritage foods (like aam panna and jeera-flavored drinks), appealing to culture, tradition, and nostalgia, could have an edge in the market.
Market adaptation
Recommendations for brands
The PwC report also notes that about 32% of consumers are "financially coping," while 7% are financially insecure and struggling to pay bills. In light of these changes, the advisory firm recommends brands focus on better discounts and loyalty programs. These strategies would not only support short-term conversion but also foster long-term consumer retention in a volatile pricing landscape.