Indian consumer sentiment continues to remain low

India’s consumer confidence level is dipping and this

is reflected in retail sales, says a recent Nielsen study, which tracks consumer buying. The consumer confidence index was 118 in the second quarter of calendar year 2013, a two-point decrease from the first, and a one-point decrease from a year ago, says the study.

Piyush Mathur, President of Nielsen India, said in a statement that the dip in confidence reflected the worries about the rupee and inflation. “Overall discretionary spending has taken a hit, with families cutting down on out of home entertainment and expenditure... However, they are relatively optimistic about the job market,” said Mathur.

Majority of retailers saw operational expenses soar, impacting profit margins. Analysts say the trend is the same for listed players such as Trent, Pantaloons, Shoppers Stop and Provogue as for unlisted firms Lifestyle, Charles & Keith, Pepe, Hi-design and Wrangler.

Among the respondents in the Nielsen study, 34 percent said they would buy new clothes; in the first quarter it was 41 percent. Thirty-three percent said they would invest in new technology. A year back 38 percent had said they would buy new technology and 33 percent new clothes.