Consumer Sentiments during Economic Downturn

Economic Downturn has hit hard the consumer sentiments and consumer spending is substantially low at present. Let's try and understand; what is the effect of such a situation on the consumption of different types of products.

I divide the whole range of products into 3 categories; Essential Products, Luxury Products (Designed for high class people), Semi Luxury Products (Considered as luxury for middle class).

Essential Products like Food items are always critical for consumers. Unless the economy is like the one in 1930, it's difficult for such items to see a downward trend in their consumption.

Luxury Products like Mercedes cars which are primarily designed for high class & cash rich people, are unlikely to see a heavy downward trend since the economic downturn has very minimal effect on the pile of cash that these set of people are sitting on.

Semi Luxury Products like Nike shoes, Jewelry items; which are primarily considered as Luxury for Middle class people will see a heavy downward fall in the consumption pattern. A middle class person often goes to a Nike showroom when he/she has good amount of disposable income, doesn’t think much about value-for-money and emotionally attached with the brand. Then he/she doesn’t mind paying 100% extra on his/her shoes. During economic downturn, middle class often faces the maximum risk of loosing jobs. Mostly his source of income is through salary and his cash reserves are normally not good enough to sustain his family without a job for even 12 months. So it essentially for him to cut down on the fatty expenses (he will be happy not going to Nike showroom) and ensure his cash reserve increases so as to face the effect of bad time in near future.

My 2 cents on it!!!