Majority of households plan to open their wallets this festival season: Survey

Overall spending to still fall short of pre-pandemic level

Retailers that were bruised by the pandemic might find some solace in LocalCircles’ most recent survey that showed a majority of Indian households planned to loosen their purse strings in the first festival shopping season free of Covid-19 restrictions.

The pollster said it expected spending during the festival season this year to be at $32 billion, which is higher than 2020 and 2021 levels, but short of the pre-pandemic festive season in 2019, which saw spending of $37 billion. The survey received over 58,000 responses in total from participants in urban and rural areas, but all participants did not answer all questions.

65% of households planned to spend on everything from clothes to gadgets this festival season which stretches until mid-November, while 35% have decided to refrain from shopping, according to the survey that got responses from consumers in 362 districts across the country.

“Many households, especially (the) middle class and lower, have been feeling the squeeze from high fuel prices, price of essentials, commodities like milk and edible oil for most of this year. At the same time, there are other affluent households with high disposable incomes, who haven’t done their festival shopping and social events/parties in the festive period during 2020 and 2021 due to Covid and are raring to shop and spend this year,” the survey platform said.

The survey found that 49% of those who planned to spend would likely do so in stores or markets, while 38% aimed to shop online. The survey showed a 20% increase in the number of shoppers who were likely to visit stores versus last year.

That is good news for the brick-and-mortar chains in Asia’s No. 3 economy that lost a lot of their clients to e-commerce firms during the pandemic due to reasons including safety, convenience and affordability. In-store shopping might also encourage impulse buying.

One in three Indian households planned to spend over Rs 10,000 this season, the survey found.

Generally, these are households from upper middle class or upper classes in India along with any middle-class families making a major purchase during the festive season. It is common for families to buy homes, cars and jewellery during the festival season as many consider it to be auspicious.

Of those planning to spend, 3% households planned to spend Rs 100,000 or more; 9% between Rs 50,000 to Rs 100,000; 15% between Rs 20,000 and Rs 50,000; 6% between Rs 10,000 and Rs 20,000. 17% planned to spend between Rs 5,000 and Rs 10,000.

LocalCircles also found that only 20% of households planned to spend on big-ticket items, cementing the view that the pandemic had affected rich and poor households differently and increased income inequality in India.

Covid-19 was no longer a concern for most respondents heading into the season, with nearly one-third of those spending focused mostly on getting good value for their money ahead of Diwali and other festivals.

35% of 12,892 respondents planned to spend on Pooja/ Diwali supplies, 26% on festival groceries, 12% on fashion and beauty items and another 12% on home renovation products. 4% of the household consumers will spend on jewellery and automobiles each, while 6% planned to open their wallets for electronics and appliances each.

24% from a total of 12,000 respondents disclosed plans for travel, 20% for home repairs and 14% for other services.