Source : INDIA TODAY NEWS
Festive shopping may be on everyone’s mind, but not every household is ready to open its purse strings this year. With prices still high and borrowing getting costlier, urban Indians appear to be planning their festive purchases more carefully, even as they prepare for Diwali and other celebrations.
Urban households are likely to spend an average of Rs 20,000 on discretionary purchases this festive season, down from last year, according to a survey by LocalCircles. The survey estimates that total urban household festive spending will fall 6% to Rs 1.97 lakh crore in 2026, from Rs 2.10 lakh crore in 2025.
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The findings point to a more cautious festive season, with nearly one in three households planning no discretionary spending at all. Among those who intend to shop, clothing, footwear and accessories remain the biggest draw. However, a large share of households also expect to dip into their savings to pay for festive purchases.
The survey received over 67,000 responses from urban household consumers across 307 districts of India.
NEARLY ONE IN THREE HOUSEHOLDS PLANS NO FESTIVE SHOPPING
The survey found that 57% of urban households are likely to spend on discretionary purchases during the festive season, while 31% said they have no plans to spend on such items.
Among those planning to shop, 18% expect to spend less than Rs 10,000, while 15% have set aside Rs 10,001 to Rs 25,000. Another 9% plan to spend between Rs 25,001 and Rs 50,000, and 6% expect to spend between Rs 50,001 and Rs 1 lakh.
At the higher end, 9% of respondents said their festive spending could range from Rs 1 lakh to Rs 10 lakh. Meanwhile, 12% were unsure about how much they would spend.
Overall, 30% of households expect to spend between Rs 10,000 and Rs 1 lakh, while 18% plan to keep their budget below Rs 10,000.
The cautious approach comes at a time when households are dealing with rising prices and uncertainty over future expenses. Retail inflation rose to 5.54% in September from 4.83% in August, while food inflation climbed to 7.74%, according to government data.
This leaves households with less room to increase discretionary spending after accounting for essential expenses such as food, rent, school fees and utility bills.
FESTIVE SPENDING FALLS 6% AFTER LAST YEAR’S RISE
The estimated Rs 1.97 lakh crore festive spending this year marks a reversal from 2025, when spending rose to Rs 2.10 lakh crore from Rs 1.85 lakh crore in 2024.
Last year’s festive season coincided with GST 2.0 rate cuts, which took effect on September 22, 2025, giving consumers a tax-led boost just as major shopping sales began.
This year, households do not have a similar boost to rely on. Inflation remains elevated, and the Reserve Bank of India (RBI) raised the repo rate by 25 basis points to 5.50% on October 7, its first increase in more than three and a half years.
Higher interest rates can make loans more expensive if banks pass on the increase to borrowers, adding to the financial pressure on households already managing monthly expenses.
The RBI has also raised its inflation forecast for the current financial year to 5.2% and expects inflation to reach 6% in the October-December quarter.
While the central bank has raised its FY27 GDP growth forecast to 7.1%, household spending plans suggest that consumers may remain selective about where they put their money.
CLOTHING LEADS FESTIVE SHOPPING PLANS
When it comes to shopping priorities, clothing, footwear and accessories are firmly at the top of the list. Around 72% of households planning festive purchases said they intend to buy items in this category.
Home appliances and furniture, along with travel and holidays, came next, with 45% of respondents planning to spend on each. Gourmet food and gifting featured in the plans of 39% of households.
Mobile phones, consumer electronics and gadgets were each part of the shopping plans of 22% of respondents, while another 22% intended to spend on home renovation and interiors. Around 10% planned to buy an automobile or a two-wheeler.
Jewellery, however, attracted relatively little interest, with just 6% of respondents planning a purchase in this category.
Elevated precious metal prices could be one reason for the subdued interest. Gold and silver have become significantly more expensive, making jewellery purchases a bigger expense for households planning their festive budgets.
Online shopping platforms have reported strong activity in categories such as fashion, beauty and festive decor. However, higher device prices are weighing on expectations for smartphone sales. Counterpoint Research expects festive smartphone volumes to decline 12% year-on-year, even as the value of sales rises.
This suggests that shoppers may continue to buy during the festive season but could be more careful about expensive purchases.
HOUSEHOLDS TURN TO SAVINGS TO FUND FESTIVE PURCHASES
Perhaps the most telling finding is how households plan to pay for their festive shopping.
According to the survey, 83% of households planning discretionary spending expect to use their savings to some extent. Around 34% expect savings to fund at least a quarter of their festive budget.
Of these, 18% expect to use savings to cover 25% to 50% of their spending, while 16% said their festive purchases would be funded entirely through savings.
By comparison, 17% said they would rely entirely on their earnings and would not use savings.
The findings suggest that even households keen to celebrate may be relying on money set aside earlier rather than depending solely on their current income. While using savings can help avoid borrowing, it also leaves less money available for unexpected expenses or future financial goals.
With inflation eroding purchasing power and borrowing costs rising, households may have to make harder choices between festive treats and longer-term financial needs.
In other words, the survey paints a picture of urban India preparing to celebrate, but with a closer eye on the household budget. Clothing, home purchases, travel and gifts remain on shopping lists, yet a sizeable share of consumers plan to spend little or nothing on discretionary items.
The expected 6% fall in festive spending also marks a shift from last year’s growth, when GST rate cuts provided an additional boost to purchases.
This time, households appear more inclined to stick to budgets, postpone expensive purchases and use savings to meet festive expenses. The celebrations may continue as usual, but for many families, the bigger question is not what to buy, but how much they can comfortably afford.
– Ends
SOURCE :- TIMES OF INDIA
