Romanian consumers in budget squeeze as they adapt to increasing uncertainty

Three major consumer trends are emerging around this period:

1. Rising prices are the number one concern for Romanian consumers, followed by the Ukraine invasion, healthcare costs and unemployment. Eighty-four percent of respondents say prices are among their top three concerns, while two-thirds say prices are their top concern
2. Consumer pessimism is likely to continue. Most respondents expect that prices of essential products will further increase over the next twelve months. Gen X and baby boomers are particularly affected, as older consumers are more likely to have lower incomes. However, all generations are feeling the pinch. To stretch their budget, eighty percent of consumers changed behaviors when shopping for groceries and essentials. Of these, more than three-quarters switched to lower-cost or private-label household products.
3. Consumers are shifting activity, channels, and brands in pursuit of better prices and value for money. In the last four to six weeks, one out of three consumers have switched stores for their groceries and basics. When shopping for essentials, consumers are trading down across all categories with alcohol and fresh fruits/vegetables least affected.

These exhibits are based on survey data collected in Romania from November 2022. Check back for regular updates on Romanian consumer sentiments, behaviors, income, spending, and expectations.

Healthcare costs and access are also a concern, while millennials (18-34 aged) are particularly worried about unemployment and job security. Almost half of all Romanians are worried about the Ukraine invasion, and 56 percent of baby boomers (55+ aged) are concerned by the cost of healthcare. Their children and grandchildren, however, are more likely to be worried about the job market, with 41 percent of millennials choosing this as a top concern.

Discounters and supermarket / hypermarket formats are showing the most resilience, as consumers are decreasing spend across the board. Almost a third of consumers changed retailers in the last six weeks. Those who did so were driven by the promise of better prices (35 percent) and gasoline savings (18 percent). A further 22 percent said they switched to get better value for money or better quality.

Discounters are benefitting the most from consumer loyalty, but their limited footprint constrains their growth. Large-format stores, such as supermarkets and hypermarkets, are increasingly attractive as consumers trade convenience for price.