Belgians curb their spending amid inflation

As inflation continues to rise in the country, Belgians are cutting back on spending and sales of some foods and durable goods are suffering as a result.

Among the budgetary factors weighing heavily on Belgian households at the moment are historically high energy prices, the steep cost of fuel, lingering effects of the pandemic and instability due to the war in Ukraine.

Inflation was at 8.31% in March, its highest level since the same month in 1983, and so now Belgians are looking to save where they can. 

“Household consumption had already fallen at the end of 2021 and the March forecasts predict very modest growth in the first half of 2022, with a further contraction, albeit limited, in the second quarter,” reports the National Bank of Belgium (NBB), underlining the delayed effect of government support measures for purchasing power. 

“In total and compared to the autumn projections, household consumption has been revised downwards by 1.8 percentage points in 2022.”

Consumer confidence sank considerably in March, the NBB said, and although it rose slightly in April, its collapse may nevertheless prompt consumers to cut back on their spending a little more. 

“People go to the shops but buy less or postpone their purchases,” Pierre-Frédéric Nyst, president of the Union des classes moyennes (UCM), told Le Soir. 

“Few people do not have the reflex to consume less, and it seems that this is set to continue. The NBB predicts that purchasing power will not increase significantly before 2023.”

Belgians are cutting back spending on groceries by choosing store brands and hunting for special offers. They’re also limiting the number of times they go out to eat and are spending less at specialty shops like bakeries and butcher shops. 

“More and more people are turning to hard discounters where chicken legs and minced meat are sold cheaper,” said Pierre Bouillon, co-chairman of the National Federation of Butchers, Delicatessens and Caterers of Belgium. 

Those who continue to visit the butcher are reducing their order: “Gone are the days of the 2 kg leg of lamb for six people. Customers are now buying as little as possible.”

Other areas in which households are looking for savings include electronics and fashion.

Luxury goods are likewise seeing a decrease in sales, according to AG Real Estate, which manages several shopping centres in Brussels: “People are still indulging themselves but are more in control of their spending.”

Photo: (c) Belga/Jonas Hamers