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Where to cut costs?

Spending right is also about slashing costs at the right places. Here are simple strategies to help trim monthly expenses without compromising on your lifestyle.

Print Edition: April 30, 2009

Spending right is also about slashing costs at the right places. Here are simple strategies to help trim monthly expenses without compromising on your lifestyle.

FOOD & BEVERAGES

Share of consumption: 2008 - 40%, 2009 - 30%

Strategies:

  1. Buy at discount stores.
  2. Buy staples in bulk.
  3. Eat less meat, more veg.
  4. Cut out on junk food.
  5. Substitute expensive ingredients.

Can help cut cost by 20%

TRANSPORT & COMMUNICATION

Share of consumption: 2008 - 12%, 2009 - 13%

Strategies:

  1. Combine trips for shopping and entertainment.
  2. Consider car-pooling.
  3. Bundle phone, cable, Net services with one operator.
  4. Shift to lower rate plan if you don’t use a service fully.
  5. Consider prepaid plans for cell phones if usage is low.

Can help cut cost by 15%

HOUSEHOLD PRODUCTS

Share of consumption: 2008 - 3%, 2009 - 3%

Strategies:

  1. Buy durables during sales.
  2. Shop online for gadgets.
  3. Hold on to upgrades.
  4. Consider used furniture.
  5. Mix and match home furnishings across brands.

Can help cut cost by 15%

HOUSING & UTILITIES

Share of consumption: 2008 - 12%, 2009 - 13%

Strategies:

  1. Shift to a lower interest rate home loan, cut EMI.
  2. Move to a less expensive location, save on rent.
  3. Use energy-efficient appliances to cut power bill.
  4. Insulate to reduce AC and heating costs.

Can help cut cost by 10%

EDUCATION & HEALTH

Share of consumption: 2008 - 9%, 2009 - 11%

Strategies:

  1. Switch to per-day gym package if not a regular.
  2. Switch to generic medicines wherever possible.
  3. Club routine doctor visits.
  4. Explore online study aids.

Can help cut cost by 5%

APPAREL & FOOTWEAR

Share of consumption: 2008 - 5%, 2009 - 5%

Strategies:

  1. Switch to private labels and in-house brands.
  2. Buy at factory outlets.
  3. Consider semi-formals.
  4. Stock up during offseason discount sales.

Can help cut cost by 20%

PERSONAL PRODUCTS

Share of consumption: 2008 - 11%, 2009 - 9%

Strategies:

  1. Consider using grooming products instead of visits to beauty parlours.
  2. Buy smaller packs of products that are not used frequently.
  3. Cut down on costly cosmetic treatments.

Can help cut cost by 25%

ENTERTAINMENT

Share of consumption: 2008 - 7%, 2009 - 8%

Strategies:

  1. Shift from a restaurant to a budget eatery.
  2. Explore weekend getaways for short vacations.
  3. Move to morning shows, weekday movie tickets which are cheaper.
  4. Cut down on expenses on parties and weddings.
  5. Download music.

Can help cut cost by 30%

Potential savings estimates based on prices in metros; consumption share figures for 2009 are estimates; source for consumption patterns: McKinsey, Technopak, Indicus Analytics.

SPENDING TRENDS IN INDIA

  1. Consumers are substituting highcost pepper with chilli.
  2. Fast-food joints like McDonalds have not seen a drop in sales.
  3. Sales of high-end accessories like branded bags, belts have been hit.
  4. Kirana stores benefit by offering products on credit.
  5. Sale of private labels compared to standalone brands is picking up.
  6. Gyms are launching per-day packages to lure customers.
  7. Package tours are being preferred by out-bound Indian tourists.
  8. Advance bookings for air tickets and hotel rooms are going up.
  9. Weekend getaways from bigger cities is seeing a spurt in demand.
  10. Last-minute bargains are increasing.
  11. Upgrades for gadgets, cars and televisions are taking a hit.
  12. Mp3 players sell more than iPods, illegal music downloads on the rise.
  13. Big-ticket spending as on property and renovation is on decline.
  14. Cosmetic sales have seen only a marginal decline of less than 10%.
  15. Education spending has not been impacted at all.
  16. 25% increase in sale of milk cartons
  17. 30% decrease in average travel budgets

GLOBAL TRENDS

  1. High-cost white pepper is being replaced by black pepper.
  2. Sale of meal ingredients is growing faster than ready-to-eat meals.
  3. Sale of in-store labels has gone up by 25% compared with brands.
  4. Discount stores like Wal-Mart have seen a spurt in footfalls and sales.
  5. Demand for carbonated beverages and storage products has dipped by 20%.
  6. The number of US consumers who are buying music CDs has fallen by 17 million in a year.
  7. Holiday sales have dipped by more than a fourth across Europe and the US.
  8. Students priced out of four-year colleges migrate to two-year ones.
  9. There is a 27% increase in number of local customers (within a km) in Britain.
  10. Chocolate sales in the US, UK growing despite a 10% price increase last year.
  11. Tobacco sales increased by 9% and alcohol sales by 6% in the UK last year.
  12. Lipstick sales in the US have increased by 11% in the past year.
  13. Average ticket sales at soccer matches in the US have risen 18% in one year.
  14. Spy gadget sales have seen a 15% increase in sales in Europe.
  15. Cable TV sales have not been affected by slowdown in the US and Europe.
  16. 20% increase in chocolate sales in the US and UK
  17. 23% increase in payments for music downloads

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