The price tags have gotten heavier, but the shopping bags haven’t gotten lighter. An energy shock has made everything from fuel to fashion costlier, yet the tills are still ringing—retailers reported brisk sales in the April-June quarter, and shoppers appear to have taken the price hikes in their stride.
Two policy breaks explain the cushion, experts say: the GST rate cuts of last September, which made several items cheaper, and the February 2025 move making annual incomes below Rs 12.75 lakh tax-free for salaried taxpayers, which left more money in consumers’ pockets.
Policy Cushions
The clearest signs of buoyancy are at the premium end. At Shoppers Stop, Kavindra Mishra, managing director and CEO, confirms demand picked up from mid-February and sustained through Q4 FY26 and Q1 FY27, with momentum continuing into July. The department-store business delivered 6% like-for-like growth in Q1, with shoppers spending 10% more per visit. The premium portfolio — 72% of department-store sales — grew 15%, evidence that the well-heeled customer is doing the heavy lifting while price-sensitive segments stay soft.
The Indian shopper, in short, is still willing to pay for the label — but wants to be convinced it’s worth it. That has helped brands grow without resorting to a discount war. “We don’t see a slowdown or major shifts in demand trends. But we are watching the space in terms of inflationary pressures,” said Amisha Jain, MD & CEO, Arvind Fashions, whose revenue rose 15.5% in Q1 FY27 despite the West Asia conflict, higher petroleum prices, foreign-exchange pressures and rising minimum wages.
There has been some cooling — sales growth eased from 10% year-on-year in March to 6% in June, data from the Retailers Association of India (RAI) shows. But there’s been no cliff. “While the intent to spend remains intact, they are highly value-conscious,” said Kumar Rajagopalan, executive director and CEO of RAI.
That distinction is the heart of the story. Consumers aren’t cutting discretionary purchases so much as redrawing their shopping lists. The same customer who hunts down promotions and value packs on groceries will happily spring for a premium lipstick, a branded sneaker or a weekend experience — if the proposition feels worth it. Households economise on the everyday; the young trade up on beauty and fashion. Baskets are shrinking, but the trips are multiplying, especially online.
The pizza box tells the same story. At Jubilant Foodworks, Domino’s like-for-like sales growth improved to 2.5% in the June quarter from 0.2% in March, while delivery order volumes kept climbing despite price hikes. Affordability matters; abstinence is nowhere in sight.
Quick Commerce
Digital commerce is adding another layer to the resilience. Reliance Retail’s transactions surged 46% year-on-year to 568 million in Q1 FY27, far outpacing revenue growth. Dinesh Taluja, chief financial officer, said the divergence reflected the growing weight of digital commerce, with grocery claiming a larger share of online transactions at smaller ticket sizes. Quick commerce is rewiring shopping habits: the weekly big shop is giving way to a stream of small, frequent orders, with convenience itself now part of the value equation.
Geography offers another clue. Avenue Supermarts CEO Anshul Asawa said revenue from the brick-and-mortar business grew 15.1% in Q1, with profit after tax up 12.8% (both standalone). The telling detail: older, large metro stores were flat, while non-metro stores kept growing well.
India’s consumption story, in other words, is spreading out. Rising aspirations, expanding organised retail and easier access to brands are opening up tier-2 and tier-3 catchments, even as the big metros turn into contested turf, with quick commerce squeezing store productivity and customer frequency. It is, experts said, a two-speed retail market—new India adding consumption, old India fighting over it.
None of this means inflation and energy costs have stopped biting; they have simply changed the rules of engagement. Retailers are fighting on the margins—selective price increases, tighter inventories, premium assortments, sharper promotions, digital distribution—absorbing some of the pain rather than passing it all on at once.
As Jubilant FoodWorks MD & CEO Sameer Khetarpal put it: “The consumer environment continues to demand both affordability and compelling value. We will use pricing selectively to protect the structural economics of the business, while keeping customer value at the centre of our proposition.”
That may be the sharpest sketch of India’s retail consumer today: wallet open, but eyes wide open too. Which is why retail executives are betting the momentum carries into the festive season — provided they keep the value proposition sharp
Tomorrow: Home sales