5 days ago
Indian Consumers Keep Spending, But Demand Value Over Splurging
Prices for fuel, clothes, and other goods have gone up, but people in India are still shopping.
Tax changes gave some families more money to spend.
Wealthier shoppers continued buying premium fashion and beauty products.
Other shoppers looked more carefully for discounts and good value.
People are buying smaller amounts more often, especially through quick-commerce apps.
Domino’s sales improved even after prices increased.
Stores outside major cities grew faster than some older metro stores.
Retailers are trying to balance higher costs with affordable prices.
They hope shoppers will keep spending during the festive season.
Retail sales remained brisk in the April-June quarter despite higher energy and other prices.
GST cuts and a February 2025 tax exemption cushioned household finances, experts said.
Premium shoppers drove growth, while value-conscious consumers sought promotions and smaller baskets.
Reliance Retail transactions rose 46% year-on-year to 568 million in Q1 FY27 as online grocery expanded.
Non-metro retail stores continued growing, even as older large metropolitan stores were flat.
- Who
- Indian consumers, retailers, brands, and food-service companies.
- What
- Retail spending remained resilient despite inflation, energy-cost increases, and price hikes, although shoppers became more value-conscious.
- Where
- India, including metropolitan, tier-2, and tier-3 markets, as well as online channels.
- When
- The trend was reported for the April-June quarter, or Q1 FY27, with some momentum continuing into July.
- Why
- September GST rate cuts and the February 2025 tax change for salaried incomes below Rs 12.75 lakh supported consumer spending, while retailers adapted to higher costs through selective pricing and promotions.
Retail Growth And Premium Demand
Value-Conscious Consumer Caution
Overall spending
Retail Growth And Premium Demand
Retailers reported continued demand, premium categories grew strongly, and food-delivery order volumes increased despite price hikes.
Value-Conscious Consumer Caution
The Retailers Association of India said consumers still intended to spend but were highly value-conscious, with sales growth slowing from March to June.
Shopping behavior
Retail Growth And Premium Demand
Affluent customers continued purchasing branded fashion, beauty products, and experiences when they saw clear value.
Value-Conscious Consumer Caution
Many households economised on everyday goods, used promotions and value packs, and shifted toward smaller, more frequent purchases.
Market geography
Retail Growth And Premium Demand
Non-metro stores and expanding digital commerce indicated that consumption was spreading into tier-2 and tier-3 markets.
Value-Conscious Consumer Caution
Older large metro stores were flat, while quick commerce put pressure on store productivity and customer frequency.
Key facts
- Retail growth
- Retail sales growth eased from 10% year-on-year in March to 6% in June, according to the Retailers Association of India.
- Shoppers Stop
- Department-store like-for-like growth was 6% in Q1, while spending per visit rose 10%.
- Premium demand
- Shoppers Stop’s premium portfolio, representing 72% of department-store sales, grew 15%.
- Arvind Fashions
- Revenue increased 15.5% in Q1 FY27.
- Reliance Retail
- Transactions rose 46% year-on-year to 568 million in Q1 FY27.
- Domino’s
- Like-for-like sales growth improved to 2.5% in the June quarter from 0.2% in March.
- Avenue Supermarts
- Standalone brick-and-mortar revenue grew 15.1% in Q1, while profit after tax increased 12.8%.
Quotes
Kumar Rajagopalan
Executive director and CEO of the Retailers Association of India
“The consumer environment continues to demand both affordability and compelling value. We will use pricing selectively to protect the structural economics of the business, while keeping customer value at the centre of our proposition.”
financialexpress.com
“We don’t see a slowdown or major shifts in demand trends. But we are watching the space in terms of inflationary pressures.”
financialexpress.com
Sources
Related news
India’s Consumer Demand Holds Up Despite Inflation and Conflict
India’s Smartphone Market Splits as Premium Phones Rise
India Smartphone Sales Slump 10% as Premium Segment Surges
India's 2026 Household Budgets Shift as Groceries Fall, Rents Rise
Premium Spending Becomes an Everyday Habit for Indian Consumers
Marico CEO Says Indian Consumer Insulated Amid Emerging Market Woes
Sugar Spike Threatens FMCG Margins Ahead of Festive Season
Consumer services, healthcare, durables drive FPI reversal in July
Retail Q1: Demand Strong, Margins Mixed
