Food prices decrease has spurred the appetite for more expensive products

The hike of pensions, salaries in education and health systems, average income, as well as reducing VAT on food led to an increase in purchasing power and of the population’s confidence, a GfK Romania survey notes on Monday.

These were reflected in the 1.5 percent growth of household consumption for FMCG products compared to the previous year. The market dynamics was driven by increasing purchased volumes. They grew by 4 percent last year. With the cutting VAT on food, uptrading phenomenon appeared for the first time in the last three years, which means switching to a superior product in the same category.

This has been supported by the growth of some products more expensive: “For example, we can talk about categories like fish and seafood, dried fruit, honey, breakfast cereals, cider, special products for body care,” the survey reads.

The market growth comes only through modern trade, where the figures show a different trend compared to traditional commerce.

Purchasing behavior has suffered slight changes compared to previous years: consumers go shopping less often, but spend a little more each time.

“Lowering the frequency of purchase and the fact that Romanians have put in the basket more expensive products, it shows some easing of their shopping. They no longer take so strict the shopping list as they did before and, even if they are still looking for good prices, the tend to buy as cheaply it seems to be diminished,” Raluca Raschip, Consumer Goods and Retail Director GfK Romania stated.