A Season That Should Have Been Careful
By all reasonable expectations, this should have been a cautious holiday season. Inflation has been a hot topic. Supply chains were rattled by the West Asia war.
But none of it seems to have made a dent on what Indian consumers are actually buying. Executives at consumer companies and retailers, and consultants are describing a season of surprisingly strong demand. This is especially true in aspirational and premium categories – exactly where you would expect a nervous consumer to start pulling back first. “Consumer sentiment has been a bit resilient and seems to continue,” said Rakshit Hargave, managing director at Britannia Industries. He added that Indian consumers mostly did not feel the impact of the war at all.
But those headwinds aren’t make-believe. Executives pointed to real inflation pressure in cocoa, sugar, etc. They also sounded a wary caution on on monsoon rains, farm output and rural demand. But consumption has held up reasonably well despite those concerns — which is a more interesting story than the good news or the bad news alone.
Where does the confidence come from
The explanation is structural, not sentimental. Sanjay Sharma, managing director at Orkla India, maker of MTR breakfast mixes and Eastern spices, cited three tailwinds. They include the GST cut late last year, cooling inflation in the first quarter and interest rate cuts.
“We were worried about some structural problems at one point,” he said. “Demand is up and strong, but—” “Except for a deficit monsoon, there is nothing serious to worry about but its effects are yet to be seen.”
Some of the brands which have already launched campaigns ahead of the festive season starting in August are Fabindia, DLF Malls, Pepperfry and Nykaa. Pepperfry’s pre-season expansion is an acceleration of the mix between digital and physical retail for the company. Executive director Hussaine Kesury is banking on the festive window to bring the two channels closer together.
The Numbers Behind the Optimism: In fact, this optimism has been quantified by the Boston Consulting Group. “Three things come together for celebratory 2026 that strengthen the demand story,” said Namit Puri, the firm’s India consumer goods practice head.
First, retail inflation in the first 10 months of 2025 averaged 2.5 per cent – the lowest in a decade. So consumers are bringing real buying power into the season. Second, the 125-bps cumulative rate cut by the RBI in FY26 has lowered EMI cost on big-ticket festive purchases. Third, GST rationalisation has directly reduced the cost of aspirational categories, making them accessible to buyers who may have waited.
Last year during the festive season, consumer spending on weddings, clothing, electronics and automobiles had peaked at ₹12-14 lakh crore. In fact, BCG estimates the festive window alone now accounts for some 30% of annual retail sales.
The Actual Change Behind the Figures
But behind those numbers is a demographic shift that may matter more than any single policy tailwind. With India’s per capita income crossing $2,500, a new kind of consumer is emerging.
Well-travelled, aspiring, been-around-the-world consumers are ready to pay a premium for quality,” said Arvind Mediratta, founder of Elixiir Foods. Last week, the company launched its first fresh gourmet retail venture, FreshTerra.
War, inflation, a shaky monsoon: none have been enough to talk this consumer out of wanting more. And every brand is betting that this festive season won’t be enough.
