How much did the pandemic change the consumption habits of Colombians?

Recent DANE reports show that one of the first sectors to return to positive ground after the confinement measures is the retail commerce. Its sales grew 3 % in October, compared to the same month of 2019.

What the director of the entity, Juan Daniel Oviedo, explained is that "the minor restrictions on mobility led to this behavior."

Strong points were the demand for food, which grew 5.2 1Q2Q and weighed 1 percentage point (pp) in the total variation. As well as equipment for personal use and telecommunications with an expansion of 30.9 % and a weight of 0.9 pps, and home appliances with 28.3 % and 0.9 pps.

How are Colombians buying?

The Raddar consultancy, chaired by Camilo Herrera, explains in its report on "November household spending" that: it grew 4,71% compared to the same period in 2019. If you analyze the way in which an inhabitant of the national territory invests 100 pesos , it is detailed that most of it, 32.8%, goes to food.

The 23.81 TP2T is used for household needs such as services or rent, and 16.4 % in transportation and communications. The rest of those 100 pesos goes to education (5.5 %), health (4.9 %), entertainment (2.6%), fashion (2.4%) and miscellaneous expenses (11.5 %).

And what would it be like in the city? Replicating that exercise, the firm found a similar trend: 34.5% are allocated for food; 21.9% to meet household obligations; 17.2 % for transport and communications; 4.9% for health; 3.9% to education; 3.9% also for entertainment; 2.3% for fashion and the remaining 11.4 % for other fronts.

From the perspective of Alejandro Torres, professor in the Department of Economics at the School of Economics and Finance at Eafit University, despite these figures, households are still not demanding at significant levels and the intention to save prevails:

"There is a smooth reactivation, and the challenge for 2021 is to see how the economic recovery programs affect, not only the ability of companies to operate, but also to create an atmosphere of optimism that allows demand to be stimulated."

Moderate reactivation

The aforementioned Raddar balance also highlights that "the dynamics of household spending in the strong isolation phase showed a brake in almost all consumption groups, except non-durable ones."

While in the period of intelligent isolation these reductions were moderated, as was the purchase of food, which lost speed.

For example, it is observed that while the investment in entertainment of the compatriots grew to 7% in the first two months of 2020 versus the same period of 2019, for March and April it had falls of 59.5% and 62.1%, respectively. They gradually gained ground until reaching -15.7 % in the eleventh month, which, although negative, shows some recovery.

The food category started expanding in January 2020 to 6.6%, and by March, when the first confinement measures were announced, it grew 17.7%. In September, once the reopening of the bulk of productive activities was reported, the variation in this category was barely 0.9% and by November it was already at 1.6%.

Neighborhood Stores

Neighborhood stores have played an important role in all of this, reflecting trends in the demand of ordinary citizens. How much do they spend there? According to an analysis by Servinformacion and Puntored, between last October and November the national average ticket (the money that a person usually uses on a trip to the store) was 6,825 pesos.

This value is among the lowest registered last year, taking into account that for the last week of August, before entering a period of fewer restrictions on mobility, it amounted to 7,439 pesos, while by mid-March it reached the 9,786 pesos.

Beyond these figures, for the country, when comparing the demand for products in neighborhood stores between February and November, a fall is detailed in almost all segments.

Bakery products, for example, registered a decrease of 8 % in the average sale; cereals, grains and legumes, from 19 %; the same thing happened to those prepared and preserved with 12 % less. Meanwhile, lentils (1 %) and panela (39 %) showed positive dynamics.

In the perspective of Claudio Corradini, head of Strategy and Consulting at Accenture Colombia, in the event of a reduction in spending, there would be “an expansive wave” towards areas such as wholesale trade and warehousing, for example.

Tendency to change

What Javier Ubaque, manager of category management at Makro Colombia, and Jose Luis Salas, an expert at Makro, explained at the event "Sales strategies for your business" organized by that firm in alliance with Fenalco, Fenaltiendas and Emprendedores Bavaria, was that:

  •  People are not buying the same thing and are spending in places other than traditional channels, migrating towards the so-called discounters.
  • With the pandemic, changes in the consumer were accelerated, such as going beyond the price of a product to make the decision to purchase it or not.
  • People don't want to go out, for health reasons they must stay home.
  • Social networks, homes and smartphones are becoming more and more relevant as mechanisms to connect demand and supply.

Subscribe to the Newsletter

Do you want to know all the news that Servinformacion has for you? Leave us your email.

[contact-form-7 id=”5158″ /]