Overview

The LocalCircles "Mood of the Consumer" survey, conducted across 307 districts with over 67,000 validated urban respondents, finds that urban Indian households are likely to spend INR 20,000 on average on discretionary items during the September‑November 2026 festive window. This translates to an estimated total urban festive outlay of INR 1.97 lakh crore, which is 6 % lower than the INR 2.10 lakh crore recorded in 2025 but still about INR 12,000 crore above the 2024 level.

Inflation and Monetary Context

Retail inflation, measured by the Consumer Price Index (CPI), rose to 5.54 % in September 2026 from 4.83 % in August, marking the eleventh consecutive monthly increase (MoSPI, 12 Oct). Food inflation accelerated to 7.74 % from 5.97 %, with onion prices more than doubling YoY and a vegetarian thali costing roughly 10 % more than a year earlier. Wholesale Price Index (WPI) inflation jumped to 11.39 % in September from 9.92 % in August, driven by higher fuel and manufacturing costs.

On 7 October, the Reserve Bank of India’s Monetary Policy Committee raised the repo rate by 25 basis points to 5.50 %, its first hike in over three and a half years, and signalled that rate cuts are off the table in the near term (Governor Sanjay Malhotra). The RBI lifted its FY27 CPI projection to 5.2 % (from 5.0 %) and expects inflation to peak at 6.0 % in the October‑December quarter, coinciding with the festive period. The rate increase implies that a ₹50 lakh, 25‑year home loan would see its EMI rise by roughly ₹817 per month if the full cost is passed on.

Household Sentiment and Savings

The RBI’s July 2026 Urban Consumer Confidence Survey showed a decline in the Current Situation Index to 88.3 (from 90.7) and the Future Expectations Index to 115.3 (from 118.7). Net response on non‑essential current spending was 3.3, while employment net response fell to ‑21.9 (from ‑14.4). In the Inflation Expectations Survey, households anticipate 9.4 % price rises over the next year.

Net household financial savings improved to 7 % of Gross National Disposable Income (GNDI) in FY25 (up from 5.8 % in FY24), yet household financial liabilities reached 45.8 % of GDP by March 2026, outpacing asset growth since mid‑2022. Fixed‑deposit rates stood at 5.67 % in August, well below the 9.4 % inflation expectation, delivering negative real returns, though term‑deposit share of bank deposits rose from ≈55 % to ≈62 % (Mar 2022‑Mar 2026).

Survey Findings – Spending Intentions

  • 57 % of urban households surveyed intend to make discretionary purchases.
  • 31 % plan no discretionary spending at all.
  • 72 % of spenders will buy clothing, footwear and accessories; 45 % will also purchase home appliances and furniture; 45 % will spend on travel and holidays.
  • 39 % plan to spend on gourmet foods and gifting; 22 % each on mobile phones, consumer electronics/gadgets, and home renovation/interiors; 10 % on an automobile/two‑wheeler; 6 % on jewellery.
  • Spending brackets: 9 % expect to spend over ₹1 lakh, 30 % between ₹10,000 and ₹1 lakh, 18 % below ₹10,000, and 31 % no spending.

Funding Sources

  • 83 % of households planning festive purchases will dip into savings.
  • 34 % expect to fund ≥25 % of their festive outlay from savings, including 16 % who will rely entirely on savings.
  • 49 % will fund less than 25 % from savings, 17 % will use none (entirely earnings), and 0 % indicated borrowing.

Retail and Online Sales Indicators

  • Gross GST collections rose 14.7 % YoY to INR 2.04 lakh crore in September 2026; domestic GST grew 10.1 %.
  • Vehicle retail sales hit a record 25.37 lakh units in September, up 31.8 % YoY, though the Federation of Automobile Dealers Associations noted a low‑base effect.
  • Online festivals: Amazon’s Great Indian Festival (8 Oct) and Flipkart’s Big Billion Days (9 Oct) reported strong traffic; Flipkart logged 6.3 million concurrent users with ≈60 % demand from non‑metro customers; Meesho saw a 75 % YoY rise in Day‑1 orders for fashion, beauty and décor.
  • Counterpoint Research projects a 12 % YoY decline in festive smartphone volumes due to higher memory‑chip costs, even as market value rises 5 %.
  • Gold prices: domestic gold at ≈₹1.50 lakh per 10 g; silver at ≈₹2.26 lakh per kg (MCX, 7 Oct). Jewellery purchases remain muted (6 % of respondents) amid a 12 % YoY rise in gold price in August.

Survey Methodology & Demographics

  • Stratified sampling with minimum 30 % gender participation and 25 % representation from Tier 1, Tier 2, and Tier 3‑4 districts.
  • Margin of error under 7 %, confidence level above 93 %.
  • Respondent profile: 63 % men, 37 % women; 41 % from Tier 1, 28 % from Tier 2, 31 % from Tier 3‑4 districts.

Implications

The data suggest a modest pullback in festive discretionary spending relative to 2025, driven by higher inflation, elevated oil prices, and the RBI’s recent rate hike. Households are increasingly relying on accumulated savings rather than current earnings or credit, highlighting tightening financial buffers. While overall spending remains above 2024 levels, the shift away from big‑ticket categories such as smartphones and jewellery indicates price‑sensitivity. The RBI’s projection of CPI peaking at 6 % in the festive quarter underscores the risk of further consumer‑price pressure translating into retail price hikes in the coming months.