Retail sales grow 7% in May on back of a high base, says RAI
Over the past year, owing to pent up demand post the pandemic and low base, retail sales saw healthy double-digit growth. For instance, Retail sales were up 23 percent in April 2022, while they grew 24 percent in May 2022.
India’s retail sales grew seven percent in the month of May over the same month last year, according to data from the Retailers Association of India (RAI). Sales in May came in on the same lines as March and April, which saw a moderate six percent growth, indicating the slowest expansion in sales in over a year.
From a category standpoint, categories like sport goods and furniture saw the slowest growth of two percent in May, which could be attributed to wearing off of pandemic-related trends.
Footwear sales grew three percent, while apparels grew nine percent for May. Beauty, wellness and personal care category continued to remain subdued, growing five percent, while consumer electronics also saw a growth of just five percent despite the summer month of May usually being a peak season for consumer durable products like air conditioners and refrigerators.
Food and grocery sales grew eight percent, while jewellery sales were up nine percent.
Sales of quick service restaurants, another category that had seen strong double-digit growth through the past year, came in at seven percent. This was also reflected in the quarterly earnings of QSR chains like Jubilant FoodWorks that runs Dominos or Sapphire & Devyani, both which run KFC & Pizza Hut.
Over the past year, owing to pent up demand post the pandemic and low base, retail sales saw healthy double-digit growth. For instance, Retail sales were up 23 percent in April 2022, while they grew 24 percent in May 2022.
RAI said in a statement that the industry is Witnessing moderate growth over previous year as consumers get into normal business routines and taking into account the high base in April and May last year.
"The softness is in comparison to the hyper growth retailers saw last year. What we’re seeing right now is moderate growth, which is good. The next three months will help decide whether this year will be a year of high or moderate growth for the retail industry,” Kumar Rajagopalan, CEO, Retailers Association of India (RAI) told CNBC-TV18.
While RAI remains optimistic of growth, retailers have flagged a slowdown especially in smaller towns during recent earnings calls. Aditya Birla Fashion and Retail, which reported a low for the quarter, flagged a slowdown in the value segment, which also impacted sales of Pantaloons.
“At mid-teen growth in a quarter where the base includes an Omicron effect reflects softness of sales. Our overall growth rate this quarter has affected significantly across our segments… Now, it appears that there is a more widespread sort of slowdown in this period,” Ashish Dikshit, MD, ABFRL said in the earnings calls.
Companies like Shoppers Stop, V-Mart and Arvind Fashions too, had acknowledged a slowdown in demand. However, experts say with inflation coming down, demand is likely to start picking up.
(Edited by : Sangam Singh)
First Published: Jun 19, 2023 4:25 PM IST
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