PURCHASING DECISION ON CRISIS CONDITIONS

Ion Stancu Ph. D
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Ion Stancu Ph. D: University of Craiova Faculty of Economics And Business Administration Craiova, Romania

Annals of University of Craiova - Economic Sciences Series, 2011, vol. 2, issue 39, 257-262

Abstract: Consumption suffered important mutations within the past years, due to profound changes of economic policies, as well as due to the crisis triggered in 2008. Consumption prices have suffered serious modifications every year after 1990, and since 2005 a phase shift of evolution can be noticed for various products, which makes the buying decision of consumers to be on a permanent move. So, from 2005 until 2011, the price evolution in Romania for the entire consumption basket had an increase by almost 44%, while fuel growth in 2011 was of 8-9% (bussiness day -2011). This growth was influenced by oil price. However, the Brent oil price has increased by aprox. 10%, almost as fuel price, an evolution which is hard to explain since the fuel price includes around 50% taxes. For food products (a food share of 33% in the consumption basket is the highest compared with other seven former communist countries) it is necessary to consider the inflation evolution for 2011, whose forecast has been changed from 3.6% to 5.1%, while for 2012 from 3.2% to 3.6%. All this will have an effect on purchasing power as well as on consumption. The current crisis has produced major modifications in the consumption behaviour of the population , focusing mainly on food consumption. The purchasing decision of the population from urban areas is significantly different than on rural areas (consumption expenditures are with 20-30% higher in urban areas). According to data provided by INS (National Institute for Statistics), it results that only 40% of consumers have remained constant in their purchasing decision, while the rest have reduced consumption or turned to cheaper products. By processing information like the above ones, major retailers` policies must be adjusted, based on market researches which should provide data regarding the composition of consumption basket, as well as total volume of goods to be purchased.

Keywords: crisis; consumer; price; seller; product (search for similar items in EconPapers)
JEL-codes: E21 M29 M31 (search for similar items in EconPapers)
Date: 2011
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