Inflation hits durables in India.

On November 10, 2006, The Economic Times (Guragon) expressed mystification at the idea that while India's overall consumer confidence was high, retail sales were not. The Times said, "Consumer confidence has not translated into more spending decisions this quarter."

Specifically, 79 percent of respondents to the consumer confidence survey said that the current time was not the right time to buy durables. This rate of response has remained at the 79 percent level for the past three quarters. Respondents blamed higher inflation rates-especially rising prices for food grains and vegetables.

The consumer confidence survey gave consumers a choice of 13 durables items and asked about consumer purchase intentions. Responses showed either no change or a decline in intention to purchase. Indian consumers have not been able, or are unwilling, to integrate higher food grains and vegetable prices into their budgets. They appear to be willing, though, to rein in expenses for higher priced items.

"On the macroeconomic front, not much has changed for the Indian consumer," says the Times. It seems likely, therefore, that if food and other prices, such as oil and gas, remain high, consumers will maintain their frugal ways.

Throughout India's western region, especially in Mumbai, the bias against durables appears especially strong. Mumbai's consumers have reduced their purchase intentions toward housing.

When they do express favor toward durables purchases, mobile phones and two-wheelers (scooter-like motorized transport) are high on the list. This trend is more evident in the west. In eastern regions, compact disc players are the main choice.