Retail sales in India continued their moderate growth trend with 9 percent year-on-year growth for the month of July, as per data from the Retailers Association of India (RAI). In the previous month, the industry saw a growth of seven percent.
According to RAI, retailers saw some pick-up in business in the last week of July on the back of end of season sales. However, on a larger scale, the retail industry has seen a slowdown in growth, especially on the back of rising inflation impacting discretionary spending among consumers.
“Brands are making concerted efforts to create a favourable shopping environment for customers,” Kumar Rajagopalan, CEO, RAI said in a statement.
Among categories, the apparel sector grew eight percent, slightly higher from the seven percent growth in the month of June. Footwear also saw moderate growth of seven percent, while jewellery grew 12 percent.
Retail companies also called out slowdown during the quarter. Jagdish Bajaj, CFO of Aditya Birla Fashion And Retail said during the Q1 earnings call that the consumption slowdown seen in the discretionary category post-festive last year continued during this quarter as well, and EBITDA for the quarter was impacted due to subdued sales. Venu Nair, MD and CEO of Shoppers Stop also said that the mass and masstige segment in apparel continued to have muted growth. He also called out pent-up demand in the previous year as a factor.
“Last year, the same quarter, as you are aware, we had the pent-up demand post-Covid, being the first quarter after Covid when the markets had opened. In addition to that, we had also spoken about the global uncertainty, persistence of inflation and the prevailing uncertainties globally. All of this will ease off, and it will take time for that to happen, particularly in the informal sector,” Nair added.
Quick service restaurants (QSR), which was one of the categories that has seen slowing growth in the past few months, saw some improvement while growing at 15 percent in July YoY. However, QSR companies continue to flag subdued growth, especially companies like Jubilant FoodWorks.
Beauty and personal care also saw some improvement growing at 10 percent, while food and grocery grew at 14 percent. Consumer Durables, which also saw a washout in their peak summer season, continued single digit growth at nine percent.
However, companies say that the sector is starting to see some signs of revival since June. “June has been better and July is continuing in the same lines,” Shoppers Stop’s Nair said during the earnings call.
Retailers are now pinning their hopes on the festive season hoping for a pickup in sales.
(Edited by : Keshav Singh Chundawat)
