Inflation has three out of four people in Austria comparing prices more often

Inflation is when you pay 30 euros for a 20-euro haircut you got for 10 euros when you still had hair. After almost three decades of stable prices, inflation is also making a comeback in this country. A representative survey conducted by market research institute GfK on behalf of the online department store Galaxus showed the following: seven out of ten residents of Austria expect inflation rates to exceed the 5 per cent mark this year. For comparison: experts at WIFO, the Austrian Institute for Economic Research, predict average inflation of 7.8 per cent (document in German) for the current year. In June, the prediction was 8.7 per cent.

According to the survey, it’s elderly people in particular who are pessimistic: eight out of ten people over 60 believe inflation of 5 per cent is to be expected this year. No wonder, given that they remember the impact of high inflation in the 1970s and 1990s. The outlook of respondents from lower income groups is also on the gloomy side. Inflation hits them harder than average because heating oil, gas, gasoline or diesel account for a larger share of their household budgets.

Meanwhile, a look across the border shows the majority of survey participants in Germany are also expecting inflation rates of over 5 per cent. This is unlike Switzerland, which is sailing through calmer waters for time being because of the strong franc.

Price bots pruning the price jungle

The Austrian population is responding to rising prices by comparing deals more often. Three out of four respondents said they paid more attention to fuel prices before filling up the car, searched for the cheapest flight before booking a beach holiday or opened two dozen tabs before popping those diapers on special offer in their cart.

Lower income groups are particularly influenced by the expected inflation. Individuals with a household income of less than 3,000 per month compared prices more often in around 8 out of ten cases. Those with 5,000 euros or more at their disposal every month only compared more products than they did before in 6 out of 10 cases. There are also differences when it comes to states: in the west of Austria, people are more budget-conscious than in Vienna, Lower Austria and Burgenland.

However, at least when it comes to shopping online, the price increase doesn’t mean that the range of prices will become wider: «Prices for toothbrushes, cat food or mobiles are so dynamic and easy to compare online that retailers can’t just pass on the higher prices to their customers directly,» says Hendrik Blijdenstein, who’s in charge of purchases and sales as Chief Commercial Officer at Galaxus. «If someone still tried to pull this off, they’d be left sitting on their goods.» One exception is scarce goods: for example, recent months have seen large price differences for graphics cards or game consoles.

There’s no time like the present

Almost 3 in 10 survey respondents also stated they’d be buying things earlier because they expect prices to rise. This is particularly the case in young people, women and inhabitants of western Austria. The logic behind this shopping behaviour? If a pack of muesli bars costs 5 euros today and potentially 7 by the end of the year, you’re best off stocking up now.

How are you reacting to the rising prices? Are you busy knitting woolly socks because heating costs will be through the roof in winter? Are you making pre-emptive purchases? Are you bored by reports on the inflation? Join the discussion in the comments section!