Guest Column

The wallet tales

Do special occasions really dictate spending in India, especially during times of recession? Neeti Mehra finds out

Neeti Mehra

With due respect to the Colombian wordsmith, Gabriel García Márquez, and his choleric tale about the enduring power of love, Love in the Time of Cholera, this column adds a materialistic twist to passion.

When money is tight, does it trickle out on special occasions? Money, much to the consternation of die-hard romantics, might not be able to buy love, but it can smoothen the process of falling in love. After all, diamond rings, Dom Pérignons and whirlwind vacations to the Bahamas come at a price.

Has consumer confidence risen to the pre-crisis days to uncork the bubbly? Or is it that spending never met a barrier, but rather a gentle speed bump, if at all. For starters, what is consumer confidence? It's an optimistic point of view of a consumer towards the overall state of the economy and their personal financial situation. On this world view depends their spends, and ultimately, the shape of the economy.

Emptying the wallet in 2010

Let us look at spending per se on food and tourism broadly elsewhere. A Nielsen research for the US economy which has borne much of the brunt of the crisis, reveals that consumers' newfound thriftiness of 2009 will continue this year. 19 per cent customers say that they intend to save more money. Food coupons' redemption saw a spurt of 26 per cent, consumers 'traded down' across food categories, and food departments outperformed non-food, health and beauty and general merchandise departments. Clearly the stomach has, prudently, and in a somewhat threadbare version, found home in the hearth.

Travelling fares marginally better. According to a TripAdvisor survey for the US, 41 per cent of respondents said that they plan to spend more on leisure travel in 2010 than they did in 2009 and 92 per cent of travellers are planning to take two or more leisure trips, up from 89 per cent last year.

What's happening at home? A recent think-tank of economists pegged the growth of the Indian economy at 7.5 per cent, a welcome sign in a world dominated by collapsing economies and negative growth rates. In India, the Centre for Monitoring Indian Economy's (CMIE's) Consumer Pyramids, a survey of Indian households for 2008-09 pegged the nation's household income for the last financial year at Rs 28 billion. Interestingly, Indian households devote nearly the same proportion of their annual income on recreation and alcohol (0.64 per cent and 0.6 per cent, respectively). Eating out scores more than the tipple (1.02 per cent of annual income). Food expenditure (excluding money spent on eating out) is over 25 per cent of household annual income, an oblique testament to galloping inflation. On travel, 'cautiously optimistic' is the opinion of most industry stakeholders.

Moshe Shek	Sumedh Singh Mandla
Kavya Madappa	Mukesh Kumar

Tummy tales at home

Has the recession affected the business of eating out? Moshe Shek, proprietor, Moshe's, hasn't experienced any decline in footfalls, yet corporate events have taken a hit, while his catering outfit has doubled in business.

With the decline in international tourists, restaurants frequented by them did feel a dip, especially after the terror attacks, but the desi guest did not desert his dessert. Mukesh Kumar - GM, Ramada Plaza Palm Grove, Juhu, makes some observations: Firstly, that eating out isn't considered a luxury anymore and it offers respite from cooking and eating at home.

The fortunes of the pour dipped though. Sumedh Singh Mandla, CEO Aspri Spirits admits that though the recession definitely affected the buying habits of the consumer early during last year, "But India is among the first set of countries to emerge out of the recession and thus sales of premium beverages has seen an upsurge in last few months," he adds.

On the whole, Kumar feels there will be definite increases in F&B spends this year, with an improvement in the economy, increase in jobs, growth in careers and a consistently increasing spending power in general.

Cupid's miscalculated arrow?

Where does this leave amorous wining and dining as the world limps out of recession? When the heartstrings tug, the purse strings are automatically yanked open, especially on special occasions. Look at its commercialised best: The US National Retail Federation's 2009 Valentine's Day Consumer Intentions and Actions survey, conducted by BIGresearch found that the total Valentine's Day spending is expected to reach a whopping US$ 14.7 billion. In the same survey, 47 per cent planned to head to their favourite restaurant. While the predictions for the year are not out yet, it can only be assumed that this year should fare better than the abysmal 2009.

In India, the story is slightly different. A niche segment commemorates love; Valentine's Day, irrespective of what marketers would like us to believe, isn't ingrained in our lifestyle as such. The special occasions that do cause a swell in business, however, are days that precede holidays, says Shek, especially bank holidays. Indicating that the financial world still makes merry till the wee hours, the bust notwithstanding.

The bubbly will have it good though. Mandla does anticipate a spurt in wine and champagne sales on D-day. Aspri is introducing Valentine hampers with Champagne Lombard and French bubbly Bulle No 1 from Limoux. "The period from October to February is clearly the best period for wine and champagne sale in the country," says Mandla.

Another spurt will be seen in weekend stays (this year it falls on Sunday) with couple massages, romantic dinners, and ardour thrown in for good value. In fact, spa treatments are becoming very popular. Kavya Madappa, MD of the Amanvana Luxury Boutique Spa Resort in Coorg, speaking of the near nine-month-old property located on the River Kaveri, says that couple spa treatments are becoming quite popular with guests. Recession has not been experienced yet, given its relative newness and limited bungalow inventory, though they did experience a dip in occupancies in the monsoons. A healthy 80 per cent occupancy is what Madappa foresees for the holiday weekend.

So for all the brouhaha, V-Day isn't exactly the anticipated D-Day that guarantees ringing cash registers thanks to the cherub's love-tipped arrow. That distinction still lies with the bankers and their stash of holidays.

The author is a freelance writer and can be contacted at work.neeti@gmail.com. The views expressed by the author are her own.