Retail Sales is expected to boom in Festival period :2024

Economists believe that retail sales during the 2024 festival season in India will be particularly high due to a combination of economic trends, consumer behavior shifts, and external factors. Here’s a breakdown of the key reasons:

1. Strong Economic Recovery and Growth

India’s economic recovery following the pandemic has been steady, with higher GDP growth rates and improving macroeconomic indicators. Factors like robust industrial output, higher tax collections, and enhanced government spending on infrastructure and welfare are all boosting consumer confidence. The festive season traditionally sees an uptick in consumer spending, which will be further amplified by this broader economic recovery.

2. Rising Disposable Incomes

Rising incomes, particularly in urban and semi-urban areas, have led to greater disposable income, which in turn fuels consumer spending. In 2024, wage increases, bonuses, and better job opportunities are contributing to increased purchasing power, which is expected to be reflected in higher retail sales during the festival season.

3. Easing Inflation

Inflation, which had been a concern in previous years, is expected to moderate in 2024, leading to greater affordability for consumers. Lower inflation, especially in essential goods like food, fuels, and clothing, gives consumers more room to spend on discretionary items such as electronics, home appliances, and luxury goods, which are popular purchases during the festive season.

4. Favorable Rural Demand

A good monsoon and higher agricultural output are likely to boost rural incomes, which will play a significant role in increasing retail sales. Rural India contributes significantly to festival season sales, particularly for products like consumer durables, vehicles, and electronics, making a positive rural economy a key driver.

5. Rise in Digital Penetration and E-Commerce

The continued rise of e-commerce and digital payments is a major factor driving sales. The penetration of smartphones and internet access in smaller towns and cities has opened new markets for retailers. With more consumers shopping online, especially during festive discounts and flash sales, the potential for higher sales is greatly amplified. Economists expect e-commerce sales in 2024 to hit new highs during the festive season, driven by this digital revolution.

6. Election Year Impact

2024 is an election year in India, and historically, consumer sentiment tends to be more optimistic during such periods. Political parties often introduce schemes and offer incentives to voters, which can lead to increased liquidity in the economy and higher consumer spending. Additionally, pre-election government spending on infrastructure and rural development boosts consumer confidence and disposable income, resulting in higher retail sales.

7. Revenge Shopping and Pent-Up Demand

Post-pandemic, consumers still exhibit signs of “revenge shopping”—a trend where people compensate for lost spending opportunities during lockdowns by indulging in bigger and more frequent purchases. Economists believe this pent-up demand, coupled with festival season traditions, will continue to push retail sales higher in 2024.

8. Favorable Financing Options

The availability of easy financing options like EMIs, BNPL (Buy Now Pay Later), and low-interest credit card offers has made it easier for consumers to make larger purchases. Retailers and banks are expected to provide even more attractive financial products during the 2024 festival season, making it easier for consumers to buy big-ticket items.

9. New Product Launches and Aggressive Discounts

Retailers are likely to launch new products and offer aggressive discounts to capture consumer attention during the festive period. Economists expect this competition among retailers to result in higher sales, especially for sectors like electronics, fashion, and automobiles. Major festivals are typically the time when consumers plan for large purchases, and the marketing push from brands will add to this.

10. Growth of Organized Retail

The organized retail sector, including malls, large retail chains, and online platforms, is growing rapidly in India. This growth provides consumers with more choices, a better shopping experience, and access to quality products, all of which will help boost retail sales during the festival season in 2024.