How and what parents spend money on during pandemic
During the pandemic, the structure of spending typical for families with children has become more obvious, SberIndex analysts reported. Their new tracker on parental spending in March-October 2020 will be presented at the 11th Congress of the Children’s Products Industry, which is taking place on November 18-20. The event is organized by the Ministry of Industry and Trade of Russia and the Association of Enterprises of the Children’s Product Industry with support from the Government of the Russian Federation.
Alexandra Altukhova, Director of Special Solutions, Sberbank:
“Especially for the congress, we’ve timed our new tracker by the SberIndex Laboratory on the purchasing power of parents during the coronavirus pandemic. Perhaps its key outtake is that against the background of a 6.8% reduction in total spending from March to October 2020, parental expenses remained practically unchanged, while in some areas they even increased relative to last year. We see that during the pandemic parents started spending more on gadgets (+47.5% y-o-y in the Computers and Software category, +14.6% y-o-y in the Department Stores category, + 14.6% y-o-y in the Home Appliances and Electronics category). Average spending on entertainment (+13.5% y-o-y) and toys (+11% y-o-y) grew stronger than for customers without children. Sports expenses dropped much less than in the country as a whole. Parents probably tried to let their children do sports even during the pandemic.”
According to the SberIndex tracker, stimulus checks in June and August 2020 contributed to higher spending among families with children (+5.9% y-o-y). The increase was due to their spending in the following categories: Computers and Software, Department Stores, and Home Appliances and Electronics.
Analysts believe that the general change in people’s habits during the pandemic, including the change in the traditional gift categories for children — toys (for little ones) and gadgets (for older children) — was the key factor affecting consumer behavior. The effect of COVID here is the need to equip children with gadgets, which they will need later for all types of remote communication, primarily for studies.
Increased parental spending did not come along with higher borrowing. This group of clients generally borrows more, but no abnormal surges in the volume of borrowing are spotted. According to SberIndex analysts, in 2020, the ratio of the average amount of debt per person in a group of parents with children aged 0-5 years to the same metric for consumers without children was even slightly lower than last year, and in groups with children over five, it was a little higher.
Changes in consumer behavior of parents generally coincide with major trends. Between March and October 2020, travel expenses (airline and train tickets, hotels, duty-free shops) decreased by an average of 60%, spending on cafes and restaurants (–40.4% y-o-y), sports (–24.9% y-o-y), and entertainment (–57.8% y-o-y) fell significantly. At the same time, the demand for Home Appliances and Electronics increased faster among parents than in the country as a whole (+14.6% y-o-y vs. +10.6% y-o-y in Russia as a whole).
Also, families with children could not forego buying clothes or footwear. In these categories, average spending among such customers only lost 1.4% y-o-y as compared to –14.1% among other customers.
Changes in consumer behavior were the most profound among parents whose children are under three years old. The share of spending in the Clothing, Footwear, and Accessories category increased by 19%; in the Department Stores category, which includes the main online retailers, it soared by 35%; while for the average consumer without children the changes were –16% and 11%, respectively. Parents’ spending on toys also stands out, with its share up 8% compared to last year against the background of a decrease in the same metric for other buyers.