India’s discretionary consumption showed signs of revival in the third quarter of FY25, driven by GST rationalization, festive demand, and improving affordability, according to Gaurav Jogani, Director and Consumer Analyst at JM Financial. Consumer footfalls strengthened from late October as new GST rates came into effect, while festive shopping boosted sales across select categories. The second quarter had been muted due to heavy monsoon rains, anticipation of GST cuts, and cautious consumer sentiment, but October witnessed a sharp rebound. November trends have been mixed, with December expected to sustain healthy demand.
Premium jewellery and value fashion emerged as standout performers. Jewellery sales grew despite a 43 percent year-on-year surge in gold prices, supported by investment-driven demand, attractive exchange schemes, and a shift toward more affordable 18-carat options. Value fashion retailers also reported robust traction, particularly in eastern and northern India, benefiting from an early Navratra season. In contrast, mid-premium and premium apparel brands continued to face headwinds amid high base inflation. Quick-service restaurant chains remained under pressure, with steady footfall but smaller ticket sizes and heavy discounting affecting profitability.
Jogani emphasized that Indian consumers are not structurally downtrading but are increasingly seeking higher value for money. While luxury and super-premium brands like US Polo and Ralph Lauren maintained strong performance, mid-premium players experienced the most pressure as spending polarized toward either end of the price spectrum.
Recovery in QSRs is expected to be gradual, with only low to mid-single-digit same-store sales growth projected in the second half. Jewellery growth is likely to be driven by value rather than volume, as consumers adjust spending patterns to accommodate higher gold prices. Analysts suggest that the market’s revival is uneven, favoring categories that combine affordability with perceived value, while mid-tier discretionary products continue to navigate challenging conditions.










