Inflation has affected consumer behaviour

By Yiannis Seitanides

Cypriot consumers have reacted, as one would expect, to the increased inflationary pressures of recent months by reducing the volume of their purchases at supermarkets and becoming more careful about what products they buy.

Data from Cypriot retail market research company RetailZoom shows that in March 2022, compared to March 2021, the number of visits to supermarkets decreased by 14.97 per cent (from 8.7 visits per month to 7.44).

Moreover, total spending was down by 13.72 per cent and the total number of baskets that passed through the checkout counters was 18.33 per cent lower.

At the same time, the weighted average basket value increased by 5.62 per cent to €42.46 in March 2022 from €40.20 in March 2021.

The rise in value took place despite the fact that consumers shopped less overall, confirming that their purchases became more expensive.

The economic sentiment survey for the month of April shows that consumers will continue to be hesitant.

Consumers’ assessments of the future financial situation of their households remained close to the negative March levels.

Also, expectations of price increases over the next 12 months remain at very high levels, suggesting continued upward pressure on consumer goods prices.

The data compiled by RetailZoom is drawn from the majority of supermarkets in Cyprus and provides a representative picture of market trends and the impact of inflationary pressures on consumer behaviour.

Meanwhile, the Cyprus Statistical Service (Cystat) announced on Thursday that the Harmonised Index of Consumer Prices in March 2022 increased by 6.2 per cent compared to March 2021.

Compared to the previous month, the index increased by 1.8 per cent.

Statistical data shows that energy is the biggest drain on family budgets.

On a year-on-year basis, the largest changes are in the categories of housing, water, electricity and LPG (17.2 per cent), transport (10 per cent) and food and non-alcoholic beverages (10 per cent).

The largest changes in the economic categories compared to both March 2021 and the previous month were observed in energy, with rates of 28.3 per cent and 4.7 per cent respectively.

The mildest increase took place in terms of a basket of ten basic daily essentials.

The overall weighted average price of rice, coffee, sugar, oil, cereals, pasta, cheese, yoghurt, honey and milk rose by 4.43 per cent year-on-year in March.

However, prices have been picking up, especially in such products found on consumers’ breakfast tables.

Cereals have risen by 11.83 per cent, milk by 11.80 per cent, cheese by 10.82 per cent and yoghurt by 8.28 per cent.

Of the other goods, pasta has seen the most significant increase of 7.62 per cent.

The above increases are in line with the international trend.

Other items, such as rice (+0.555), coffee (+0.63 per cent) and oil (+0.44 per cent) exhibited milder increases.

On the other hand, the price of sugar has plunged by 26.90 per cent while the price of honey has also fallen by 1.75 per cent.