Sociologists named the category of Russians most affected by the crisis
Economic crises, including the current one, hit hardest of all not on the poor, but on the middle class, Romir told RBC. In the context of generations, the elderly behave more rationally than others, while zoomers and millennials panic more
Consumer behavior in Russia during crises does not depend on their nature and the course of economic shocks, but on the stratum (social stratum or group) to which people belong, whether it be income or age group. It remains the same from crisis to crisis. The most rational strategies of behavior are demonstrated by the poor and the elderly, experts from M-Holding (it includes the Romir research company) told RBC on the sidelines of the conference “Transformation of the World and Man” organized by him, which was held on September 29 at the Russian University of Economics. Plekhanov.
According to Andrey Milekhin, the founder of M-Holding, President of Romir, in general, society adapts to each crisis in about two months.
Impact of crises on different social classes
In any crisis, including pandemic and sanctions, the three main classes - the poor, the middle class and the rich - repeat their consumer behavior, Milekhin noted. However, the poorest population is by no means the most vulnerable, he argues.
According to the researcher, there are usually indicator goods, the mass buying of which by the poorest population is an alarming sign indicating a consumer panic. These are cheap pasta and washing powder (once it was bread and soap), two basic commodities needed to sustain life. “But in recent crises, the state and business manage to keep society from a complete consumer panic that comes from the poor. The last time we recorded a rush demand for indicator goods was in 2008,” he specified.
The reason why the poorest population does not panic is that in Russia there is a traditional "fuse" - the preservation of labor skills in food production, maintaining a personal subsidiary plot, planting a vegetable garden. “Half of the population lives in small towns and rural areas, a third of the country's population itself reproduces up to half of the food basket. Due to this, the poor are less vulnerable to crises,” Milekhin explained. In addition, social payments support the incomes of citizens in need, the Ministry of Finance notes in the "Guidelines" of the budget policy for 2023-2025. In the second quarter, the volume of social payments amounted to 4.1 trillion rubles, or 21.2% in the structure of household income, Rosstat reported.
The most affected is the middle class, emphasized the president of Romir. Its representatives, having high salaries and getting used to city services, think: why do they need a dacha, if you can buy everything in a store? Why own a car if there is a taxi and car sharing? But with a loss of income during crises, such a strategy leads to the fact that they are drastically deprived of their usual level of consumption, ”says Milekhin.
There is no single approach to measuring the boundaries of the middle class . In 2018, the share of the middle class in Russia was 30%, Alfa-Bank economists estimated. As pointed out by the Higher School of Economics, before the pandemic, the middle class reached 24% of the working population, but the wave of the 2020 pandemic reduced this share by about 1.5 percentage points. HSE specialists had the following criteria for defining the middle class: possession of a certain profession, higher education, and an average income of at least 1.25 of the median income in the region. The rector of the university, Yaroslav Kuzminov (now former), warned in an interview with RBC that the fall in incomes of the middle class could also lead to the fact that Russia would not achieve a significant increase in economic growth.
The high-income group also changes its behavior during the crisis: for example, the rich compensated for the impossibility of going to restaurants during the pandemic by increasing food purchases, and the lack of shopping in other countries due to closed borders was compensated by an increase in premium goods.
Economists at Renaissance Capital wrote on Sept. 30 that the partial mobilization in Russia announced on Sept. 21 would have a dampening effect on consumer demand while savings behavior picks up. “We believe that the announced partial mobilization will have a negative impact on domestic demand, both for goods and services, preventing the continuation of the emerging recovery that we previously expected,” they said.
Generational Consumer Strategies
Older generations adapt better to crises due to the fact that they have experienced them in greater numbers throughout their lives. The oldest generations - those who met their youth during the "thaw" (now over 80 years old), and baby boomers (born approximately from 1940 to 1959) - have experienced more than a dozen economic and geopolitical upheavals, including military conflicts, currency crises, the August coup, the devaluation of the ruble, etc.
“For the older generation, the value of money is leveled, for their peace of mind, sufficient stocks of goods and possession of some things are more important. For them, entertainment is of no value, unlike the younger generation, ”said Inna Karaeva, executive director of M-Holding. During crises, these two generations spend more and increase the average check (but not too much, because they are used to saving), Romir data showed.
Representatives of generation Z (or zoomers, years of birth from 1997 to 2012) in a crisis always cut costs and transfer part of them to their parents - generation X (born from 1960 to 1980).
Generation Y (or millennials, years of birth from 1980 to 1996), as a rule, freeze their expenses, make purchases less often, but the average check naturally increases.
In general, the adult generation is accustomed to more rational consumption, while the young are more prone to panic, says Karaeva.
“The news agenda affects different generations in different ways in terms of the “hysteria” of consumer behavior. If representatives of the “thaw” are accustomed to constant events and go shopping for future use, then young people (zoomers and millennials) are more likely to panic and rush from one extreme to another: they either stop spending money altogether, or spend everything without having a reserve for the future, ”says she is.
M-Holding's researchers track changes in the consumer confidence index from the first week after the announcement of the special operation and tough sanctions, when its value was minus 18, and then fluctuated less significantly. After the announcement of partial mobilization (from September 19 to 25, the 38th week from the beginning of the operation), the index value fell to a minimum of minus 19. Experts have not yet seen a sharp increase in consumer spending or other significant changes in their behavior. According to Karaeva, it can be expected that people will switch to more rational consumption, reduce purchases in premium segments and focus on domestic brands.
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