Muted Diwali Shopping Dampens Retail Sales to Five-Year Low

Diwali shopping activity this year has failed to match the vigour witnessed during the corresponding period in 2023, with retailers reporting their lowest sales volumes in half a decade. The slowdown marks a sharp departure from the previous year's momentum, when goods and services tax rate reductions had provided consumers with meaningful relief at the point of purchase.

This year's retail environment presents a starkly different picture. Elevated input costs and climbing commodity prices have tightened household budgets, with consumers adopting a more cautious spending approach during the traditionally buoyant festival season. The cumulative effect of persistent inflationary pressures has dampened discretionary purchasing across most categories.

However, the downturn has not been uniform across all product segments. Precious metal coins—particularly gold and silver denominations—have emerged as a notable exception, recording brisk sales throughout the festival period. The strong performance in this category suggests consumers remain interested in traditional investment instruments despite broader economic headwinds.

Retailers and industry observers attribute the overall sales contraction to the absence of demand-stimulating fiscal measures that had boosted consumer confidence last year. With commodity prices remaining elevated and manufacturing costs continuing to exert upward pressure on retail prices, market participants expect the cautious consumer sentiment to persist in the near term.