data | With the pandemic gone, people are painting the city red

 

Festive Shopping: People busy in shopping ahead of Diwali on October 14, 2022 in Delhi

Consumer sentiment has increased significantly as public mobility exceeded pre-pandemic levels and unemployment levels went down

In the first week of September 2020, India recorded an average of around 80,000 daily COVID-19 cases. A year later, around 40,000 new cases were reported daily in the same period. In both these years, the festival season was suppressed due to the pandemic and related restrictions. The pandemic disrupted mobility. Even some people who did venture out had low consumer confidence and delayed their big purchases between September and December, a period usually associated with a shopping spree. Also, in 2020 and 2021, a few months before the start of the festive season, the unemployment rate skyrocketed. This means that the purchasing power of the consumers is reduced. This affected the sales of vehicles. Air travel was also affected due to restrictions and poor demand. With most offices closed or employees working from home, the festive season has come and gone without much fanfare.

In 2022, things have taken a turn for good. Daily cases are hovering around 7,000. And with mobility improving to reach pre-pandemic levels, people are indulging in 'vendetta shopping' (purchasing after a frugal spending period) driven by demand. People are also traveling a lot, which is reflected in the number of domestic travelers in recent months. In addition, unemployment levels hit the lowest level in 45 months.

Chart 1 shows the Google Mobility Index during the pandemic period. It measures visits to different locations by keeping the baseline as a five-week period from January 3 to February 6, 2020. A positive value indicates an increase in visits from the baseline period and a negative value indicates a decrease. In 2020, visits to retail and entertainment centres, parks and transit stations remained well below baseline prices. In 2021, while the dynamics were better, it mostly remained below the average price. However, in 2022, from the last week of September to the first week of October, park visits were between 60% and 80% compared to baseline. Similarly, visits to retail and recreational purposes increased by 10%-20%.