Urban Households Plan To Spend Less This Festive Season, Survey Finds

Urban India's festive shopping plans look more restrained this year, with households budgeting less even as a majority expect to make some discretionary purchases. A LocalCircles survey estimates that urban households will spend an average of Rs 20,000 during the September-November festive season, bringing total spending to Rs 1.97 lakh crore.

That would be six per cent lower than the estimated Rs 2.10 lakh crore in 2025, when goods and services tax (GST) rate cuts coincided with the start of the festive season. Spending is still expected to exceed the Rs 1.85 lakh crore estimated for 2024.

LocalCircles received more than 67,000 responses from urban consumers across 307 districts. In the spending question, 57 per cent of respondents said their households planned discretionary purchases, while 31 per cent said they would not spend on such purchases. Another 12 per cent were unsure.

Among respondents who plan to spend, budgets are mostly below Rs 1 lakh. Thirty per cent of all respondents expect to spend between Rs 10,000 and Rs 1 lakh, while 18 per cent plan to spend less than Rs 10,000. Nine per cent expect to spend more than Rs 1 lakh.

Clothing Leads Festive Shopping Plans

Clothing, footwear and accessories are the most commonly planned purchases: 72 per cent of households that expect to spend selected this category. Home appliances and furniture, and travel and holidays, each featured in the plans of 45 per cent of respondents.

Gourmet food and gifting were selected by 39 per cent. Mobile phones, consumer electronics and gadgets, and home renovation or interiors each drew 22 per cent. Only six per cent said they planned to buy jewellery. Respondents could select more than one category.

Savings To Fund A Share Of Festive Purchases

The survey also points to households using savings to manage their festive budgets. Of those answering a question on how they would fund planned spending, 83 per cent said they expected to use savings to some extent. This includes 34 per cent who said savings would fund at least a quarter of their festive purchases, and 16 per cent who expected to rely on savings entirely.

Forty-nine per cent expected savings to cover less than a quarter of their spending, while 17 per cent said they would fund purchases entirely from earnings. No respondents selected borrowing as a funding source.

The figures arrive as households face higher prices and borrowing costs. Consumer price inflation rose to 5.54 per cent in September, while food inflation reached 7.74 per cent, according to the report. The Reserve Bank of India raised its repo rate by 25 basis points to 5.50 per cent on October 7, its first increase in more than three and a half years.

LocalCircles said its estimate of Rs 1.97 lakh crore was based on the spending levels respondents indicated. The survey used responses from consumers registered on its platform; its polls had a margin of error below 7 per cent and a confidence level above 93 per cent, according to the organisation.

The survey suggests that many urban households will continue to mark the festive season with shopping, but will keep a closer eye on the size and source of their budgets. For a significant share, savings will help bridge the gap between planned purchases and current income.

FAQs

What is the average festive spending planned by urban households?
LocalCircles estimates average spending at Rs 20,000 per household, with total urban festive spending projected at Rs 1.97 lakh crore.

Which purchases are households most likely to make?
Clothing, footwear and accessories lead, cited by 72 per cent of households planning to spend. Home appliances and furniture, and travel and holidays, follow at 45 per cent each.

How do households plan to fund festive spending?
Eighty-three per cent of respondents planning purchases expect to use savings to some extent; 16 per cent expect to fund their spending entirely from savings.