Indian consumers turn cautious: 63 per cent focus on savings, says Kantar

MUMBAI: Indian consumers may be tightening their purse strings, but they are not putting their lives on hold. A new consumer sentiment study by Kantar shows that while confidence in the economy and personal finances has weakened since the start of the year, households are responding not by retreating from spending altogether, but by becoming more selective, value-conscious and focused on long-term financial security.

The latest wave of Kantar’s State of the Nation study, conducted in May 2026, revisits attitudes first measured ahead of the Union Budget in January. The findings paint a picture of consumers grappling with geopolitical tensions, fears of a global economic slowdown and growing concerns around employment, while actively adapting their financial behaviour.

Confidence in the broader economy has softened noticeably over the past few months. Only 48 per cent of respondents now expect India’s economy to improve in 2026, down from 60 per cent in January. Concerns about layoffs have also risen, increasing from 36 per cent to 41 per cent over the same period.

Personal financial confidence has similarly weakened. Nearly two-thirds of consumers, or 61 per cent, expect their savings and investments to either remain unchanged or decline this year, while only 39 per cent anticipate growth.

As uncertainty rises, financial preparedness has emerged as a key priority. Healthcare costs remain the biggest concern, cited by 85 per cent of respondents, followed by rising living expenses at 80 per cent. Meanwhile, 78 per cent worry about having enough money for retirement, with consumers aged between 36 and 45 reporting the highest levels of concern. Managing rent and loan EMI commitments is also weighing on households, with 71 per cent expressing concern.

The response has been a stronger focus on saving. Nearly two-thirds of consumers, or 63 per cent, say they are very likely to increase savings for themselves and their families. Yet financial pressures remain visible. One-third of respondents reported a decline in savings and investments compared with 2025, while only 28 per cent said their financial holdings had grown.

When it comes to spending, consumers are increasingly making calculated choices. Intentions to increase discretionary spending on categories such as dining out, entertainment, shopping and subscriptions have edged down to 53 per cent, compared with 55 per cent in January. The proportion planning to cut discretionary spending has risen from 8 per cent to 10 per cent.

The shift is even more evident in larger purchases. Consumers planning to spend more on big-ticket items have fallen from 46 per cent to 44 per cent, while those intending to reduce spending have jumped from 11 per cent to 16 per cent.

Inflation remains the primary driver of caution, cited by 65 per cent of respondents. Other factors include a desire to build savings, concerns about economic uncertainty and worries about investment returns.

Households are also making practical adjustments to manage expenses. Around 44 per cent are focusing on reducing electricity and fuel costs, 42 per cent are eating out less frequently and cooking at home more often, while 41 per cent are cutting subscription spending. Another 39 per cent are delaying purchases until major sales events and actively hunting for discounts and promotional offers.

At the same time, consumers continue to favour investments perceived as safe and reliable. More than half of respondents, 52 per cent, said they are very likely to buy gold over the next 12 months, reinforcing the precious metal’s enduring appeal as a store of value.

One area that remains surprisingly resilient is travel and experiences. Despite greater caution around everyday spending, consumers continue to prioritise activities that offer emotional fulfilment and personal enrichment.

The study found that 60 per cent plan to take a domestic holiday over the next year, while 52 per cent intend to travel overseas. A similar proportion said they are likely to spend on once-in-a-lifetime experiences.

The findings suggest that consumers are drawing a clear distinction between routine expenditure and meaningful experiences. While households are becoming more disciplined in managing daily finances, they remain willing to invest in travel, memories and experiences that contribute to wellbeing.

Commenting on the findings, Kantar executive managing director, south asia Deepender Rana said, “Our latest report shows that Indian consumers remain resilient but are becoming noticeably more cautious as economic and geopolitical uncertainty rises. Confidence in future financial growth has softened, while concerns around job security, retirement preparedness and rising living costs have intensified.”

He added that consumers are increasingly prioritising savings, value and long-term financial security while continuing to protect spending on experiences that improve quality of life.

For brands, the message is straightforward. Consumers are still willing to spend, but they are asking tougher questions about value. In an environment shaped by uncertainty, companies that can demonstrate relevance, build trust and help consumers feel more financially confident are likely to be best positioned to win both attention and loyalty.