The festival buying, which begins around the start of Navratri and ends shortly after Diwali, was seen as a litmus test of whether the consumer was back and whether retail sales were on the rise. The signals are mixed, but overall the mass consumer still seems to be holding back. The Confederation of All Traders of India issued an optimistic note saying retail purchases during the holiday season exceeded 1.25 lakh crore. But individual consumer sectors had a different story to tell. Godrej Appliances said the rebound since last Diwali was 14% higher in sales, but still below Covid Time. Maruti Suzuki, the biggest seller, said they sold around 1.5 lakh units, while in previous years the average was around 1.8 lakh units. E-commerce players like Amazon and Flipkart, however, resisted the trend with robust growth of 23%.
Anecdotal reports meanwhile showed that the driving force behind the festival’s sales were the wealthy and bottled elite, who loosened their purse strings. They had the cash to buy high-end gadgets and jewelry. However, large retailers like Vijay Sales have said they get good value for money from expensive products like frost-free refrigerators. But they conceded that their volumes were flat in the mass category of ordinary kitchen utensils and basic electricity.

Various micro and macro reasons can be attributed to the less than expected boom in Diwali. In Mumbai, on Dhanteras’ auspicious buying day, passenger car sales fell 12% and two-wheeler sales fell 32% from last year. Buyers said the drag was the continued rise in fuel prices over the past two to three months. On the other hand, Hyundai and other automakers have said they have a large backlog of Diwali time delivery requests, but cannot meet them mainly due to a shortage of electronic chips and other components. Another drag on speed has been strong inflationary pressure from rising component and transportation costs. A report by private consultancy IHS Markit said Indian businesses were worried about rising input costs, which led to lower business confidence. While some sectors have opened up, the average consumer remains suspicious and much more needs to be done to restore confidence and boost sales.