Festive Struggles: High Inflation Tempers India's Festival Shopping

Rising food prices and inflation have dampened early sales in India's festival season. Retailers report slower growth in electronic sales compared to estimates. High retail inflation affects disposable income, prompting consumers to delay significant purchases. The economic impact remains uncertain as retailers offer discounts to boost sales.

The festive season in India, known for bustling consumer activity, is witnessing a cautious start this year as rising prices of edible oils and vegetables dampen spending. Retailers highlight a sluggish increase in sales of electronics and home appliances, fearing the effect of inflation on disposable incomes during the crucial shopping period.

Year-to-date figures suggest electronics sales have risen merely 5-7%, falling short of the expected 8-10% growth. Retailers like Nilesh Gupta of Vijay Sales remain optimistic, hoping for a rebound as the festival season unfolds. Meanwhile, economic forecasts predict a growth of 7.2% for 2024-25, though high retail inflation continues to pose risks.

Consumer behavior reflects strain; many are postponing non-essential purchases amidst escalating food prices. Notably, onion prices have surged, significantly impacting households with limited incomes. Retail platforms such as Reliance Retail, Amazon, and Flipkart offer attractive deals to spur consumer interest, yet online sales remain underwhelming.

(With inputs from agencies.)