Luxury spending and vacationing declines among Russians: an exploration of financial austerity measures
In the current economic climate, consumers are adopting a thrifty approach to their spending habits, focusing on essential expenses while cutting back on non-essential purchases. According to a poll conducted among social media readers, luxury items have emerged as the most popular item to save on, followed by cafes and restaurants, and travel and entertainment [1].
Professor Alexander Safonov explains that in difficult economic conditions, families first save on goods and services that are not essential, primarily expenses on leisure and entertainment [2]. This trend is reflected in the poll results, with 79% of people saving on luxury items, 49% on vacations and travel, 44% on entertainment and leisure, and 54% on eating out at cafes and restaurants.
Luxury sales for the first half of the year have plummeted by 7-15% for fashion houses such as Gucci, Dior, Louis Vuitton, and others, underscoring the shift in consumer behaviour [3]. Family psychologist Anna Devyatka adds that the era of gloss in social media is over, and people are focusing on real values such as family and warm relationships with loved ones [4].
People are least willing to save on water and electricity usage, and also on medication, indicating that these are considered essential expenses [1]. In contrast, luxury spending offers more immediate and visible opportunities for savings by simply skipping vacations, dining out, or entertainment events.
Moreover, fixed utility costs such as water and electricity are generally less elastic—reducing consumption significantly often requires lifestyle changes or investments, which may be unaffordable or impractical in tough economic times. Meanwhile, luxury spending offers more immediate and visible opportunities for savings.
Anna Devyatka also notes that people are behaving more modestly and asking themselves if they really need luxury items and if they will impress anyone before buying them [4]. Reasonable saving is a good approach to household management, where people plan their expenses and don't impulsively buy what's unnecessary or excessive.
Professor Alexander Safonov provides rules for saving money, including buying only what you will definitely use, planning purchases, conserving water and electricity, and using seasonal discounts [5]. Additionally, 11% of people are saving on groceries by buying on sale, choosing cheaper brands, and 20% on clothing and footwear. Beauty services (haircuts, salons, etc.) are being saved on by 26%, and electronics and gadgets are being saved on by 41% of people.
In summary, consumers focus on saving by cutting back on easily avoidable luxury and discretionary expenses rather than on core utilities, where usage and costs are less flexible and more essential to daily living [1][2][3][4]. This behaviour reflects a prioritization mentality: consumers focus on where they can save money without sacrificing necessities.
- Professor Alexander Safonov states that families first save on expenses related to leisure and entertainment, which aligns with the poll results showing 79% of people saving on luxury items.
- In contrast to fixed utility costs like water and electricity, luxury spending offers more immediate and visible opportunities for savings, such as skipping vacations, dining out, or entertainment events.
- To save money, families are adopting a cautious approach, buying only what they will definitely use, planning purchases, conserving water and electricity, and taking advantage of seasonal discounts, which can also apply to food-and-drink, personal-finance, and travel expenses.
