As 2024 comes to an end, we take a moment to reflect on its progress. This year has been dynamic and eventful for Indonesia, marked by political milestones and economic challenges. Among these challenges was five months of consecutive deflation from May to September, according to Statistics Indonesia (Badan Pusat Statistik).
This prolonged period of deflation—a concerning trend where prices keep decreasing over time—signals weakened consumer demand and reduced purchasing power in Indonesia. This economic strain has been felt across various sectors, with minimarkets serving as a clear indicator: up to November 2024, customers cut their transaction frequency by 12.3%, causing a 15.7% decrease in spending per customer.
Before 2024 concludes, one remaining key event is Nataru, a term referring to the period encompassing the Christmas and New Year holidays, which holds significant potential to drive sales. During Nataru 2023, daily sales in minimarkets experienced significant growth across various product categories, including personal care items (skincare, tooth care, face care, soap, makeup, razor, and blade), beverages (soft drink, RTD, syrup, squash, powder drink, and dessert), snacks, ice creams, dairy products (e.g. cheese, margarine, and butter), delicatessens (e.g. sausages, meatballs, and processed meat), and frozen food (e.g. chicken nugget, seafood, and frozen vegetables). Nevertheless, the current weakened purchasing power could affect the performance of these products during the upcoming Nataru season. By November 2024, transaction frequency per customer across most aforementioned product categories had declined, reflecting cautious spending behavior that could influence the forthcoming Nataru season.
How will this situation influence consumer decisions for the upcoming Nataru? What budgeting strategies are they adopting for the festive season that wraps up 2024 and kicks off 2025? This article explores consumer behavior using feedback from an online survey of 100 people.
According to the survey, 51% of consumers plan to maintain their Nataru budgets at last year’s levels, while 49% intend to adjust them based on current circumstances. Of those adjusting their budgets, 29% expect an increase, primarily driven by rising prices or demand for daily needs related to the celebration, higher incomes, and larger family gatherings involving extended relatives. Conversely, 20% anticipate reducing their budgets, citing increased spending on other priorities such as wedding expenses and children’s needs, as well as declining incomes.
Most consumers plan to allocate their budgets primarily to groceries, followed by savings and travel, during the upcoming Nataru. To support their Nataru plans, the majority will rely on their regular monthly income, with some also drawing on dedicated savings and year-end bonuses.
The current economic situation is indeed impacting consumers' ability to celebrate Nataru. To adapt while staying within their plans, they are adjusting their budgets by seeking more affordable alternatives, such as discounts and promotions. Additionally, to stay within their budget, they are reducing allocations for specific expenses (e.g. savings, homecoming, travel, parties, concerts, and grocery shopping).
Regarding grocery shopping, 56% of consumers do not plan to change their spending allocation for the upcoming Nataru. Among the remaining 44% who intend to adjust their grocery budget, the majority (36%) plan to reduce their spending, particularly on items like dairy products and frozen foods, followed closely by personal care products. Meanwhile, the remaining 8% expect to increase their grocery budget.
As consumers adjust their spending plans during Nataru, promotions have a modest impact on their budget allocation for the celebrations. These promotions offer more affordable options, helping consumers stay within their budgets, with over 60% rating the impact of promotions on their spending plan at least 8 out of 10.
Among these promotions, direct discounts are the most appealing, chosen by 79% of consumers. Following closely are bundled offers, selected by nearly 50% of consumers, making them the second most popular choice.
To summarize, consumers' Nataru budgets may differ from last year’s levels due to changes in price, demand, income, and the number of people they will celebrate with. Grocery shopping is the primary allocation for Nataru, followed by savings and travel, with consumers primarily relying on their monthly income. The current economic situation is prompting consumers to seek affordable alternatives, such as discounts and promotions, while also reducing allocations for certain expenses. While the majority of consumers do not plan to change their grocery shopping allocation, a significant proportion are likely to reduce it, particularly for dairy products, frozen foods, and personal care items. Promotions have a modest impact on consumers’ spending plans, as they provide more affordable options; direct discounts emerge as the most appealing type of promotion.
We hope these insights and data are helpful to you. If you’d like to learn more about your product, we can assist you further, as we have access to over 20 million members and millions of daily transactions for in-depth analysis, including consumer behavior and other product data.
