Article examines changes in consumer behaviour occurred due to economic crisis. The article explores the changes that have occurred between late 2008 and early 2010 compared with the period from 2003 to 2008 and try to show new patterns developed by consumers arising from the crisis and developing in this context of ways of adapting for the Romanian retailers. The article also brings into attention strategies developed by shoppers for adapting to the crisis and opportunities for growing within the crisis context for the retail sector.Consumer behaviour, economic crises, retail, Consumers attitudes

Balint (Platon) Paul

Niculae Sabin Mihai

Toma Sorin

English

Research Papers in Economics

1117 
 
THE IMPACT OF THE ECONOMIC CRISIS UPON ROMANIAN CONSUMER 
BEHAVIOUR 
Niculae Sabin Mihai 
Academy of Economic Studies, Bucharest 
Faculty of Marketing 
Paul Marinescu 
University of Bucharest 
Faculty of Business and Administration 
Sorin Toma 
University of Bucharest 
Faculty of Business and Administration 
 
Article examines changes in consumer behaviour occurred due to economic crisis. The article explores 
the changes that have occurred between late 2008 and early 2010 compared with the period from 2003 
to 2008 and try to show new patterns developed by consumers arising from the crisis and developing in 
this context of ways of adapting for the Romanian retailers. The article also brings into attention 
strategies developed by shoppers for adapting to the crisis and opportunities for growing within the 
crisis context for the retail sector. 
 
Keywords: Consumer behaviour, economic crises, retail, Consumers attitudes. 
 
JEL Classification: M31. 
 
Introduction 
In 2008, Romanians state of mind could be characterized by effervescence, growth, more optimism, 
initiative,  consumption.  At  present,  we  can  speak  of  uncertainty,  frustration,  disorientation, 
vulnerability, stagnation, reserve, a wait-and-see attitude. 
This psychological shock was largely generated by the “first-time” crisis, which took the Romanians by 
surprise, as they had no similar experience after 1990. The shock was even greater since the crisis 
followed a period of growth and enthusiasm, characterized by high consumption appetite. Moreover, 
the media “buzz” stimulated and maintained the “crisis psychosis”. Up until last year everything was 
going well: the economy was growing, laws had been passed that encouraged growth, and therefore, 
there was a basis, which, at present, is no longer available. 
 
The experience of the crisis in Romania 
The way Romanians experience and perceive the effects of the crisis is strongly influenced by the line 
of business, the income level and age. 
On the one hand, regarding the middle and upper income segments, the effects of the crisis are felt 
much more on emotional level. The changes in the consumption and buying behaviour are not major yet 
and not strongly perceivable in concrete terms. Romanians are much more careful, aware, prepared to 
take measures. On the other hand, concerning the middle to low income segments, the crisis is quite 
strongly felt, including in the family budget, inducing major changes in the buying and consumption 
behavior.  Their  frame  of  mind  could  be  described  as  including  fear,  insecurity,  anxiety,  stress, 
powerlessness 
Employees in the private sector are more aware of and closer to the effects of the crisis, and sense 
greater psychological pressure and stronger adverse effects on their finances. Government employees 
are  slightly  more  relaxed,  on  account  of  not  being  in  close  contact  with  clearly  defined  business 1118 
 
indicators, hence not perceiving so strongly the impact of failure to achieve them, they don’t feel 
“directly” responsible for the effects of their work. Moreover, most of them don’t perceive clearly as 
yet the danger of bankruptcies or of dramatic salary cuts, staff cuts etc. 
The crisis has provided stagnation or reduction of income (primarily bonuses, commissions that added 
to the family budget), delayed salary payments, devaluation of the national currency in relation to the 
EUR and increase of prices of many basic products (e.g. utilities, FMCG) and lock-down of the loans 
market (banks have stopped granting loans, the new loans are expensive and with rigid conditions). 
People work more for poorer results than last year and face expense cuts policy (phone calls, company 
car, other consumables) and staff restructuring. 
Especially concerning the low income segment, difficulties in paying their debts of any kind have 
significantly grown (loan repayments, utility bills). Also, there have been an increase in loan repayment 
values. Daily basket is more expensive than last year. The crisis has blocked investments, as people 
have given up projects for which they required financing by the bank (purchase of a home / land / home 
renovation / buying a car etc.). They avoid to make plans - typical for Romanians is short term vision, 
“here and now”, which has become more apparent than in the previous years (they plan only from one 
month to the next). They envisage ADAPTING “ON THE FLY” to the new challenges, rather than 
planning  and  forecasting  (on  account  of  the  uncertainty  regarding  the  future).  Moreover,  there  is 
increased pressure and stress at work especially regarding the middle to upper income segment. 
 
Crisis perception 
The presence of the crisis is a certainty for all, though the intensity with which its effects are felt 
differently between income categories, activity line and age. Romanians with medium-high and high 
income feel the crisis more on emotional level - “on the lookout”, more mindful of what happens with 
their money - rather than in their consumption behavior, while the medium to low income segment was 
visibly affected by the crisis, which has reduced their financial stability and the comfort of everyday 
life. 
A  significant  part  of  the  working  people  have  had  their  financial  situation  affected  by  the  crisis, 
primarily as a result of a drop in additional income (bonuses, commissions etc.) and secondarily due to 
delays in salary payments.    
The  consumers’  attitude  regarding  the  evolution  of  the  crisis  vacillates  between  uncertainty  and 
skepticism. Most romanians believe that the crisis will last more than 2 years. Within the next 6 month 
they don’t expect an improvement of their family’s financial situation, and hope that it won’t be be 
worse than at present. 
Whilst last year, without the crisis, the main concerns were to provide the required amounts of money 
for a decent living (meaning enhanced comfort) and to cover the inflation rate (which threatened their 
investments and earnings), this year the influence of the crisis on the quality of life is the main fear. The 
people’s fears are much more basic, they are related to the family’s stability and security: impossibility 
to repay their debts and a drop in the quality of life, job loss, and price increase (the reason for the first 
two fears). 
In this context, the need for security and control has become much stronger. People are much more 
reluctant to take risks and the emotional connection with the family and the concern for their children 
have increased significantly. 
   1119 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Changes In Shopping Behavior 
People are not very confident in the manufacturers’ ability to adapt to the crisis without impacting the 
consumers negatively. Many Romanians believe that, on account of the crisis, the manufacturers will 
increase the prises of FMCG products. This perception (strengthened by concrete examples of price 
increases)  explains  why  Romanians  now  pay  increased  attention  to  the  price  when  choosing  the 
products as well as the shops. 
Whilst on account of the crisis the interest for additional services provided by shops has dropped 
dramatically, the diversity of products is still a key selection criterion (convenience and time saving are 
as important as the price), which justifies the consumers’ choice for modern retail. 
On  declarative  level,  Romanians  are  tempted  by  products  in  big  packs  because  they  are  more 
economical or have a better price. On the other hand, the crisis represents a growth opportunity for 
small  packs  because  –  whilst  being  more  expensive  –  they  enable  better  control  of  the  budget, 
especially for middle to low segment. 
The crisis has brought about a more rigorous control of spontaneous shopping and diminished interest 
for “indulgence”. Consequently, most Romanians stick to buying only the necessary products.   
As the price has become more important, implicitly promotions have a greater influence on the buying 
decision  regarding  everyday  products.  Attractive  promotions  would  determine  many  consumers  to 
choose another product than their regular (switching behavior).   
Consumers  would  be  tempted to  try  newly launched  products.  On the other hand,  as  people  have 
become more price sensitive and more open to promotions, a new product at an attractive price may 
become a tempting option especially for the medium to low segment.  
In the first quarter of 2009, the FMCG market increased by 18% in value, driven by the growth of 
average price and higher quantities per trip. Essential Food products were the most influenced by the 
price increase, but with no negative impact towards household consumption – constant volume over the 
last period. Supermarkets and Small Traditional Stores seems to be the most affected – due to the fact 
that price became more important for consumers. Households living in Moldavia are more sensitive to 
the price growth, while families with children up to 14 years old don’t modify their consumption 
behavior and constantly buy more volumes. Basic Hygienic categories were purchased more frequently 
but in higher quantities per trip – also due to increase preference for bigger economic packages. 
 
   
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Fig. 1. Distribution of households’ expenditures Romania 
Source: National Institute of Statistics, Household Budget Distribution 1120 
 
Strategies for adapting to the crisis 
Consumers’ strategies for adapting to the crisis should be analyzed separately for low, middle and upper 
income categories. 
- Concerning middle to low and low income segments: the crisis has reduced their comfort and quality 
of life. They try to cope with the crisis by adopting various strategies: 
−  Reduce the purchased quantities of products; 
−  The shopping list has become much more important, for better control of purchased products (they 
buy what they need and only as much as they need); 
−  They choose cheaper products within each category (milk); 
−  They  change  their  consumption  habits  in  order  to  save  money  (energy,  laundry  washing, 
cosmetics); 
−  They reduce the buying frequency or even eliminate completely some non-essential products; 
−  They pay more attention to the special offers presented in the hypermarkets’ leaflets; 
−  Visits to shops are strictly functional (no leisure trips); 
−  Greater investments and durables - delayed projects. 
- Concerning middle to upper & upper income segments: 
−  The consumption behavior has not changed significantly; 
−  The most affected areas are: savings (they cannot save as much money as they did last year) and 
holidays (they choose cheaper destinations); 
−  They try not to buy excessive quantities or to adjust the purchases to what they actually need but: 
they have not eliminated product categories and have not chosen cheaper products within each 
category, and the brand is still important.  
 
Opportunities for growing within the crisis context 
In the crisis context, price has certainly become more important. We may thus assume that modern 
retail, which offers good prices, will be the consumers’ first choice. An increased tendency to minimize 
risk and increased need for control can be noticed, on the one hand, by choosing small packs, which 
enable a better budget management, and on the other, by unconventional communication, respectively, 
the increased importance of word of mouth or, in general, of messages that induce confidence and 
reduce uncertainty (e.g. testimonials). 
Family, especially children, have become more important; children are priority no.1 and for them the 
parents are willing to invest even in times of crisis. Therefore, the products for children will be the last 
ones affected. Whilst the price of essential products has increased the most, the consumption of this 
category has been the least affected, and therefore, the promotions for essential products are the most 
attractive. 
People from the medium to low and low segment are the most price sensitive. The strategies in this 
respect imply undermining of brand loyalty in the low segment, and, at the same time, a new product 
with a good price has good chances to win consumers. People with high income are still inertial in their 
consumption habits and then, their loyalty towards brands and products is less affected. 
For the categories of products that are the first to be eliminated by the consumers in their efforts to 
reduce  expenditures,  it  is  necessary  for  the  manufacturers  to  design  strategies  to  prove  to  their 
consumers that they stand by them in these tough times. The offers in the tourism sector are an example 
of adaptation to crisis conditions. Their success is to be proven over the next months. Also, there is 
increased potential for products that enable saving, reduction of expenses related to utilities – e.g. 
detergent with increased washing power, hence requires less electricity. 
Pastimes that require small investments, or in home entertainment, will grow. There is growth potential 
for product categories for home entertaining (snacks, beer), big packs for parties or picnics, etc. In on 
trade the budget allocated per visit will be reduced, resulting in the growth of budget products or 
brands. At the same time, the interest for open air events may increase, as an alternative to going to 1121 
 
bars, pubs or restaurants, which involve greater spending – e.g. beer festival, it is important for the 
producers to be there to have their products tried. 
We  can  also  mention  that,  on  account  of  the  crisis  interest  for  social  topics  has  been  reduced 
significantly and therefore CSR campaigns will probably be less impacting and will attract attention to a 
lesser extent. 
 
Conclusions 
Romanians experience and perceive the effects of the crisis according to variables among which the 
income level is highly important. Romanian consumer behaviour has been analyzed accordingly. The 
crisis has reduced the comfort and quality of life of middle to low and low income segments, and thus 
they adapt using strategies like reduce the purchased quantities of products, they buy what they need 
and  only  as  much  as  they  need,  they  choose  cheaper  products  within  each  category,  etc.  The 
consumption  behavior  has  not  changed  significantly  concerning  middle  to  upper  &  upper  income 
segments, the most affected areas being savings and holidays. Opportunities for growing within the 
crisis context should be based on the fact that In the crisis context, price has certainly become more 
important. 
As main expectations regarding consumption over the next 6 months, we may assert that durables and 
car  purchases  have  been  the  most  affected  in  the  first  quarter  of  this  year  on  account  of  reduced 
allocated budgets, while holidays, investments in leisure and clothing are the categories of purchases 
that will continue to be the most affected by the crisis. Utilities and food are the categories that are 
expected to grow the most. 
 
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CATOIU, Iacob (coord) –Cercetari de marketing, Editura Uranus, Bucuresti, 2002 
CATOIU, Iacob (coord) Comportamentul consumatorului Editura Uranus, Bucuresti, 2004 
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CATOIU, Iacob (coord) Comportamentul consumatorului Editura Uranus,

THE IMPACT OF THE ECONOMIC CRISIS UPON ROMANIAN CONSUMER BEHAVIOUR

http://anale.steconomiceuoradea.ro/volume/2010/n2/178.pdf

THE IMPACT OF THE ECONOMIC CRISIS UPON ROMANIAN CONSUMER BEHAVIOUR

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