Urban India's consumers are showing renewed appetite for spending, fueled by easing inflation and recent tax relief, but a sense of caution remains due to job-related anxieties. Deloitte's latest consumer survey indicates a rebound in discretionary spending, particularly in areas like leisure, restaurants, electronics, and household goods. This suggests that urban households are selectively increasing their spending, favoring premium and experience-driven purchases.

Several factors contribute to this cautious optimism. The calmer inflation outlook and higher savings provide consumers with increased financial confidence. The upcoming festive season is also nudging households to loosen their wallets. Ipsos IndiaBus 2025 survey reveals that a vast majority of urban consumers are excited about shopping this festive season. Apparel tops the shopping list, followed by sweets and snacks, puja items, dry fruits and chocolates, home décor, firecrackers, jewellery and consumer electronics.

However, job-related anxiety threatens to temper the mood. This uncertainty about future income may lead the middle class to cut back on spending. According to a survey by Kantar, consumers are choosing cheaper products or services than before to manage spending, indicating a wage growth slowdown.

Despite the overall positive trend, there are marked regional differences in shopping capacity and enthusiasm. Consumers in metro cities are planning to shop across a broader range of categories and spend more overall, while those in the East zone are showing a more conservative approach, focusing on basic festive necessities.

While omnichannel retail continues to gain traction, in-store shopping remains the dominant choice for most shoppers. Over half of those surveyed prefer to shop in physical stores, while around one-fourth use a combination of in-store and online platforms. Consumers aged 45 and above, as well as those in SEC B and C segments, overwhelmingly prefer in-store shopping.

Changing consumer preferences are also evident in the types of goods being purchased. There is a growing demand for niche and premium products as consumers look for aspirational choices. Health, convenience, and nutrition are taking center stage, with a shift towards healthier snacks and products with health claims.

Overall, urban India's spending appetite is back, but with a degree of caution. While easing prices and the festive season are encouraging spending, job-related anxieties and wage growth slowdown are factors that could limit unbridled consumerism.