Expensive Diwali: Families tighten their shopping budgets

KOCHI: Rising prices are putting pressure on household budgets, affecting festive shopping this Diwali. Higher food and transportation costs, along with rising prices of consumer electronics, are making families more cautious about their spending.

With the cost of essential items ranging from onions to soap continuing to rise, households are cutting back on festive purchases. The lack of a matching increase in income is making it harder for families to manage their expenses while setting aside money for festival shopping.

Consumers are also delaying purchases as prices of products such as air conditioners, refrigerators, washing machines and LED televisions have been increased several times since March, according to the head of a leading home appliance brand in Kochi. He said the company could not achieve the expected sales growth during Onam despite extensive advertising campaigns.

The period from Onam to Diwali is one of the country's biggest shopping seasons. However, rising prices and higher costs linked to the conflict in West Asia are creating challenges for businesses this year.

Tourism Sector Also Takes a Hit

Higher airfares are adding to the difficulties faced by the tourism sector. Airlines have been dealing with increased aviation fuel costs, adding to the pressure on ticket prices.

Airfares on some major domestic routes have risen sharply compared with last year. The increase has reached 68% on the Delhi–Hyderabad route, while fares on the Mumbai–Kolkata route have risen by 51%. Strong travel demand and fewer flight options on some routes have also contributed to the increase.

E-commerce Sales See a Slow Start

Online festive sales have got off to a mixed start this year. Some estimates point to a decline in overall sales value during the opening days of the shopping festival, although other reports indicate strong order growth. Higher product prices and limited discounts are making some consumers cautious about spending.

Smartphone Sales Expected to Fall

Smartphone sales in India are also facing pressure. Rising memory chip costs have pushed up phone prices, making consumers more cautious about upgrading their devices.

According to leading research firm Counterpoint Research, smartphone sales volume in India is expected to decline by 12% during the festive season compared with last year. However, the overall value of sales is projected to increase by 5%, as higher prices support market revenue.