US-Israel War vs Iran and Mass Layoffs Hit Consumers' Wallets, Spending Budgets Begin to Be Cut

Geopolitical uncertainty and waves of layoffs are beginning to have a tangible impact on consumer behaviour. Amid an unstable global situation, people are now tending to hold back on spending and focus more on essential needs rather than non-essential purchases.

The war in the Gulf region and tensions between the United States and Iran are among the main triggers. Although there was a two-week ceasefire at one point, the chances of achieving peace are seen as increasingly slim following failed negotiations in Pakistan.

Analysts assess that this situation is making consumers more cautious in managing their finances. They are starting to redirect budgets to primary needs and seek products offering the best value.

CEO of Raymond Lifestyle, Satyaki Ghosh, revealed a slowdown in demand for non-essential products since mid-March. “After mid-March, absorption of discretionary products slowed down,” he said, as quoted from the Times of India on Monday, 13 April 2026.

Changes in consumer behaviour are also evident from the tendency to choose more affordable products. CEO and full-time director of Zydus Wellness, Tarun Arora, stated that consumers are now more selective. They are not only reducing spending but also switching to lower-priced products.

The CEO of D2C beauty brand Plum, Shankar Prasad, expressed something similar. “People are not always downgrading product classes, although there is tightening of spending with simpler routines and fewer impulse purchases.”

From the food industry perspective, Chief Marketing Officer of Parle Products, Mayank Shah, observed a significant shift in consumer preferences. “What we are seeing is a gradual shift in consumer preferences towards essential categories, with relatively higher spending on everyday necessity products, while discretionary and pleasure-oriented purchases are slightly weakening, which usually happens during periods of uncertainty.”

On the other hand, the surge in crude oil prices due to the war is also increasing production costs across various sectors. Inflationary pressures are starting to be felt, particularly in industries dependent on energy and oil-based raw materials.

Several companies in the cooking oil, packaged drinking water, beverages, and even electronics sectors have raised selling prices. As a result, the burden on middle-class households is becoming heavier.