The festive season is in full swing, with lights, celebrations, and the usual buzz of activity. But beneath the surface, a different story is unfolding in India’s markets. Consumer data reveals a surprising trend: shoppers are holding back.
The Numbers Behind the Caution
This year,
the usual festive splurge has been replaced by considered calculation. A recent survey from LocalCircles projects that total spending by urban households will fall by 6% to ₹1.97 lakh crore, down from ₹2.10 lakh crore in 2025. While a 6% dip might not sound dramatic, it points to a significant cooling of sentiment, especially as last year’s sales were boosted by GST rate cuts that are absent this year. The restraint is particularly visible in big-ticket categories. For instance, combined Navratri and Dussehra vehicle sales in Gujarat, a key market, fell by 8.2% compared to the previous year, with dealers noting that anticipated double-digit growth failed to materialize. Similarly, smartphone sales, which previously made up a huge chunk of festive e-commerce, have seen their share of total sales decline. It appears consumers are still shopping, but they are buying fewer high-value items.
Inflation's Unwelcome Impact
The most significant factor driving this restraint is the persistent pressure of inflation on household budgets. Retail inflation climbed to 5.54% in September, with food inflation even higher at 7.74%. These rising costs for daily necessities are forcing families to make tough choices and cut back on discretionary spending. The impact is especially sharp in categories with dramatic price hikes. For example, the official inflation rate for gold and silver jewellery has soared, with silver jewellery prices seeing a staggering 87.8% year-on-year increase in September. Unsurprisingly, surveys show that just 6% of households plan to buy jewellery this season. With household debt rising and savings being prioritised for financial security, the willingness to splurge has diminished significantly. Nearly a third of urban households, or 31%, report they do not plan any discretionary festive purchases at all.
A Shift From Goods to Getaways?
The spending slowdown isn't uniform across all sectors, and the data hints at a deeper shift in consumer priorities. While sales of physical goods like electronics and automobiles are sluggish, spending on experiences seems to be more resilient. Travel and holidays feature in the spending plans of 45% of households planning festive purchases, placing the category on par with home appliances and furniture. This suggests that many consumers are choosing to allocate their limited discretionary funds towards creating memories rather than acquiring more possessions. This trend of prioritising experiences like travel and dining out over material goods is a pattern that has been observed globally as economies emerge from periods of restriction, and it appears to be taking firm root in India as well. It’s not that people have stopped spending entirely; rather, their definition of what constitutes a valuable festive 'purchase' may be evolving.
Bright Spots in the Market
Despite the overarching trend of caution, there are pockets of growth. Online retail continues to be a bright spot, with some estimates projecting 25–29% growth in festive e–commerce sales, driven by an increase in the number of orders rather than higher spending per order. This indicates that consumers are shopping more frequently online for smaller–value items. Categories like clothing, footwear, and accessories remain at the top of shopping lists, with 72% of spending households planning to buy them. Groceries, food, and sweets also remain a priority. Furthermore, quick commerce is rapidly emerging as a significant channel, expanding its customer base and infrastructure. This shows that while large, discretionary purchases are on hold, spending on smaller, 'feel–good' items and essentials continues, reflecting a more value–conscious and selective consumer.
