FMCG Demand Set To Rise 9–11% This Festive Season, But Consumers Stay 'Selective'

India is heading into the 2026 festive season with expectations of stronger consumer demand, although the latest inflation data shows that price pressures have not disappeared. Retail inflation rose to 4.45% in July 2026, from 4.38% in June, while food inflation increased to 5.52% from 5.32%, according to data released by the Ministry of Statistics and Programme Implementation (MoSPI).

Despite the increase in inflation, FMCG demand is expected to grow 9–11% between August and November, according to Equirus Capital’s July 2026 Consumer Sector Tracker, as improved purchasing power and festive spending support consumption.

The recovery is already visible in company performance. Hindustan Unilever recorded its fastest volume growth in 13 quarters in Q1 FY27, while Nestlé India’s revenue rose around 25%, according to the Equirus report cited by ANI. At the same time, consumers are changing what they buy, where they shop and how much they are willing to pay for certain products.

Why Is Festive Demand Expected To Rise?

Lower inflation compared with earlier periods has helped improve consumers’ real purchasing power, giving households more room for discretionary spending. Other factors could also support consumption this year.

Professor Manish Gangwar, Indian School of Business (ISB), said “income-tax relief has left more money in the hands of a section of middle-income households,” while the RBI's cumulative 125-basis-point rate easing since early 2025 has made the financing environment more favourable. Credit cards and EMIs could also help consumers spread the cost of larger purchases.

However, Gangwar cautioned that household budgets are still facing pressure from food inflation, an uneven monsoon and higher oil prices. This could make consumers more selective rather than lead to a broad-based spending surge.

Aakash Kamble, Faculty of Marketing at FLAME University, said the festive shopping period itself is becoming longer and is no longer concentrated around Diwali. “Festive consumption is becoming a longer cycle rather than a short Diwali spike,” he said.

Anjana Ghosh, Managing Director at Scale Sherpas, said the change is not only about “how much” consumers spend, but how they spend. Consumers can remain price-conscious for everyday purchases while being willing to spend more on products linked to gifting, indulgence and celebrations.

What Are Indians Buying This Festive Season?

Food and beverages, beauty and personal care, gifting and convenience-led products are expected to see healthy demand within FMCG, according to Gangwar. Outside FMCG, electronics, appliances, automobiles, jewellery and home-related categories could also benefit from the festive purchase cycle.

The distinction between essential and discretionary spending is becoming important. Gangwar said consumers may remain careful about their grocery bills while still deciding to replace a smartphone or appliance during Diwali, particularly when discounts, card offers and EMIs make larger purchases easier to manage.

NielsenIQ’s 2026 Festive Commerce Playbook identifies two broad patterns in online shopping. FMCG and beauty are described as habit-led categories, where purchases are more consistent, while mobiles and electronics see more event-driven spikes during major shopping occasions.

This means festive demand does not affect all categories in the same way. Some products form part of regular household consumption, while others see sharper increases around specific sales events, discounts or celebrations.

Are Consumers Spending More On Premium Products?

Premiumisation is becoming an important part of the consumption trend, but it does not necessarily mean consumers are simply choosing the most expensive products.

Darshana Shah, Brand & CX Strategist and Founder of Darshana Shah - Advisory & Consulting, said “premiumisation today is less about simply buying the most expensive product and more about perceived value.” Consumers are willing to pay more when they see a clear difference in quality, experience, convenience or personal relevance.

Ashish Mishra, Co-founder and CBO of Puresta, similarly said “premiumisation today is not necessarily about choosing the most expensive product”, with consumers instead paying more for better formulations, proven efficacy, ingredient transparency and specialised solutions.

Gangwar said premiumisation and value-seeking can happen within the same household. A consumer may economise on staples but pay more for a skincare product, packaged food or appliance if the improvement appears worthwhile.

For FMCG companies, this means simply charging a higher price may not be enough. Brands need to show consumers why a premium product offers better value, whether through quality, convenience, functionality, health benefits or a more personalised experience.

Is Quick Commerce Changing Festive Shopping?

Quick commerce has become a major part of India's digital FMCG market. The combined dark-store network of Blinkit, Zepto and Swiggy Instamart had crossed 5,600 stores across 408 cities by July 2026, while Flipkart Minutes is targeting around 1,500 fulfilment centres across more than 180 cities, according to the Equirus report cited by ANI.

NielsenIQ's FMCG data shows that e-commerce accounted for 6% of urban India's FMCG sales in OND 2025, rising to 14% across all metros and 18% in the top eight metros. Quick commerce contributed more than three-fourths of e-commerce FMCG sales.

Gangwar said quick commerce has significantly reduced the time between deciding to buy something and actually making the purchase. Festive occasions create several last-minute needs, from additional groceries and beverages to forgotten gifts.

Jermina Menon, Brand & Marketing Strategist at Bhartiya Urban, said quick commerce has shortened the festive purchase window. “Earlier, consumers would plan and shop 30–45 days ahead of a festival,” she said, with a larger share of purchases now moving towards the last three to five days.

Darshana said quick commerce has moved beyond urgent or routine purchases and is increasingly becoming part of planned shopping behaviour. Consumers can discover products, compare options and complete purchases quickly, making “the digital shelf” increasingly important alongside the physical shelf.

What Are FMCG Companies Expecting This Festive Season?

The 9–11% demand-growth forecast points to a stronger festive period for FMCG companies. Equirus also expects positive FY27 sales growth across several major food companies, estimating growth of 1.9% for ITC, 10.8% for Nestlé India, 12.1% for Britannia and 9.2% for Dabur, according to ANI.

Recent company performance also shows signs of improving volumes. HUL's fastest volume growth in 13 quarters and Nestlé India's around 25% revenue growth point to a recovery in consumption.

However, companies are entering the festive season with higher palm oil, crude and packaging costs. This means stronger sales volumes will not necessarily translate into an equal improvement in profitability.

Gangwar's assessment also points to a more selective consumption environment. Consumers may continue to look for value in everyday purchases while spending more on products that offer convenience, aspiration or a meaningful upgrade.

Will The Festive Spending Boost Last?

The festive season is an important period for consumer companies, but the full pace of festive growth may not continue after the shopping calendar ends.

Gangwar pointed to credit-card spending data from 2025 as an indication of the seasonal effect. Card spending remained above ₹2.1 lakh crore in September and October 2025 before falling around 11% in November. While November spending was still higher than a year earlier, the movement shows how festive shopping can also shift the timing of purchases.

Darshana said some of the momentum could continue, although its intensity may moderate after the festive calendar. The more lasting changes, she said, are consumer expectations around convenience, digital discovery, premium experiences and personalised offerings.

NielsenIQ’s 2026 Festive Commerce Playbook similarly says India's e-commerce market is moving beyond “episodic festive spikes” towards a more structural, “always-on” growth engine. Festive periods remain important spending moments, but digital channels are increasingly being used for regular purchases as well.

For consumers, festive shopping in 2026 is therefore being shaped by several factors at once: purchasing power, selective spending, premiumisation and faster digital delivery. For FMCG companies, the festive season could provide a strong demand window, but the longer-term opportunity will depend on whether these changing consumption habits continue beyond the festive period.