A Tale of Two Forecasts
This year, the narrative around festive spending is split. On one side, trade bodies like the Confederation of All India Traders (CAIT) are forecasting a blockbuster season, with expected sales growth of 15-18% and total trade projected to cross a staggering
₹7 lakh crore. They point to buoyant consumer sentiment in physical markets, suggesting that concerns about inflation are unlikely to dampen the festive spirit. On the other side, consumer surveys paint a more cautious picture. A recent study by LocalCircles indicates that total festive spending by urban households is actually estimated to fall by 6% this year, dropping to ₹1.97 lakh crore from ₹2.10 lakh crore in 2025. The primary culprits cited are persistent inflation and the rising cost of living, which are forcing families to take a harder look at their discretionary purchases. So, who is right?
The Rise of the Strategic Shopper
The answer seems to lie not in whether people are spending, but in how they are spending. The trend is not about austerity, but about strategy. A study by consumer insights firm Saarva found that while 77% of urban consumers do plan to spend more than they would in a regular month, they are being incredibly focused with their money. The average shopper is only increasing their spending in about one or two specific categories. This marks a significant shift from the traditional, often unrestrained, spending sprees of past festive seasons. Instead of a widespread splurge, households are making deliberate choices, creating a priority list for their festive budget. It’s a move from mindless consumption to mindful allocation, reflecting a consumer who is more discerning and in control of their finances.
What's In the Cart, and What's Not
This strategic approach is reshaping the typical festive basket. Traditional mainstays like apparel, footwear, and accessories remain popular, with one survey showing that 72% of households planning to spend will purchase these items. Home appliances and electronics also feature prominently in festive wish lists. However, there is clear caution around categories that have seen dramatic price increases. Jewellery, a quintessential Dhanteras and Diwali purchase, is facing a major rethink. With gold and silver prices soaring, some reports indicate that as few as 6% of urban households plan to buy jewellery this year. This doesn't mean the tradition is dead, but it is being postponed or scaled back, a clear sign of financial prudence overriding customary habits.
From Festive Bonus to Financial Goals
The money being saved from trimmed festive budgets isn't just disappearing; it's being redirected. There is a growing movement, particularly among younger urban Indians, towards strengthening their long-term financial health. The conversation is shifting from 'what to buy this Diwali?' to 'how can this bonus serve my future?'. Increased financial literacy is a key driver behind this change. Concepts like creating an emergency fund, maintaining a good credit score, and investing through Systematic Investment Plans (SIPs) are becoming mainstream priorities. Studies show that Gen Z and millennials are increasingly conscious of planning for retirement, a goal that directly competes with short-term discretionary spending. This festive season, for many, the greatest gift is the one they give their future selves: a healthier financial portfolio.
