Festive season set to widen India’s consumption basket as retail shoppers trade up

India’s retail sector is heading into the festive and wedding season with consumers showing a greater willingness to spend, trade up and shop across a wider range of categories. From fashion and footwear to beauty, dining, entertainment and luxury, retailers are seeing consumption spread beyond traditional festive purchases, while demand is also strengthening outside the major metros.

Metro Brands CEO Nissan Joseph says festive demand continues to be an important driver, but growth is becoming increasingly broad-based across Tier 1, Tier 2 and Tier 3 markets. “We are also seeing a clear shift towards premium consumption. As disposable incomes rise and consumer aspirations evolve, more customers are willing to invest in quality, design and brands that offer a differentiated experience,” Joseph said.

That premiumisation is also showing up in the company’s numbers. Metro Brands’ revenue from operations grew 14.7% year-on-year in the first quarter, while e-commerce and omnichannel channels contributed more than 13% of revenue. Joseph expects the next two quarters to remain strong, helped by the wedding and festive seasons.

Lower GST rates have reduced the price of several everyday and discretionary purchases, while tax relief has supported household disposable incomes, giving retailers another tailwind as shoppers prepare for the season ahead.

According to the Ministry of Statistics and Programme Implementation (MoSPI), India's economy expanded 7.8% in Q1FY27, while gross GST collections rose 14.8% year-on-year to ₹1,99,853 crore in August 2026.

A recent survey of members of the Clothing Manufacturers Association of India found that 52% expect higher sales this festive season than last year, while another 30% expect sales to remain at the same level. Less than 20% anticipate a decline. Strong retailer order bookings at CMAI’s recently concluded National Garment Fairs have also strengthened industry confidence.

Indian wear is expected to be the biggest beneficiary, with 45% of respondents identifying categories such as salwar suits, churidars and kurtas as the strongest performers, followed by western casual wear including T-shirts and denims. At the same time, online apparel, which currently accounts for around 12% of apparel sales, is expected to gain momentum, challenging the traditional dominance of offline festive shopping.

Fashion leads, but the shopping basket is widening

Retail destinations are seeing the same broadening of demand. DLF Retail Group's executive director and business head Pushpa Bector said consumers are increasingly looking for value across quality, convenience and choice, with this behaviour extending across fashion, food and beverage, beauty, wellness, entertainment and other lifestyle categories.

DLF’s retail portfolio has recorded steady double-digit footfall growth over the past two to three years and now sees approximately 5 million visitors every month. Fashion accounts for more than 60% of its business, followed by food and beverage at over 20% and movies and entertainment at around 5%. Retail consumption across the portfolio is growing at about 11% to 12% annually, with footfalls now above pre-pandemic levels.

The widening basket is also reaching luxury. India's luxury spending is surging rapidly, projected to reach between $12 billion by 2028 as rising disposable incomes and a growing population of millionaires fuel high-end consumption, according to Kearney.

Sathyajit Radhakrishnan, CEO of Galeries Lafayette India and International Mono Brands at ABFRL, agreed saying Indian luxury consumers are becoming more informed and globally exposed, with luxury gradually moving from being primarily occasion-led to becoming part of everyday lifestyles among younger affluent consumers and first-generation wealth creators. "We expect demand to remain healthy, supported by the continued evolution of the Indian luxury consumer and the growing preference for accessing international brands and experiences within India," he added.

However, stronger sales may not translate into equally strong margins. Around 54% of CMAI respondents said they are absorbing higher raw-material costs by reducing margins, while only about 35% have raised prices. That leaves retailers entering the festive period with healthier demand expectations, but continued pressure on profitability.