Retailers witnessed lower than anticipated growth during the recently-concluded festival season.
As per the latest survey released by Retailers Association of India (RAI), retail players garnered an average growth of 7 per cent in October and November compared to the same period in 2022. The growth was led by high-value products while demand for low-value products was muted.
“Retailers had anticipated double-digit sales growth during the puja and Diwali season in October and November 2023; however, the sales growth has been muted for many retailers. Most retailers have indicated that footfalls were not even equal to 2022 though sales were just about the same as in the previous year. Many retailers, especially in the apparel category, only grew sales over last year because of new store openings and online sales. While like-for-like store business was negative for more than 50 per cent of the retailers surveyed,” said Kumar Rajagopalan, CEO, Retailers Association of India (RAI), said,
Flattish sales
Sakshi Suneja, Vice-President & Sector Head - Corporate Ratings, ICRA Ltd, echoed a similar sentiment. “While there has been a sequential uptick in performance of the fashion retail sector in the last quarter of CY2023, led by festive and wedding season demand, ICRA’s channel check suggests that the same remained flattish vis-à-vis last year’s festive season sales,” she said in a statement.
“Retailers did witness a growth in high-value products. Jewellery business grew on the back of higher gold prices and the demand in the latter part of November thanks to the wedding season. However, business for low-value products saw a quantitative dip. Retailers are pinning their hopes on the wedding season, occasion-wear business and end-of-season sale in the coming two months,” Rajagopalan added.
Top regions
According to RAI’s survey findings, retailers in eastern India garnered a growth of 11 per cent during the two festival months compared to same period in 2022. Meanwhile, retail businesses clocked 7 per cent growth in South India, followed by 6 per cent and 5 per cent in North and West India, respectively.
In terms of categories, the growth was led by jewellery (13 per cent), sports goods (11 per cent) and footwear segments (10 per cent). Sales of consumers durables and IT products were up 9 per cent during the festival period over last year driven by higher consumer finance schemes, RAI noted. Furniture & furnishings and beauty & personal care segments also garnered 9 per cent growth each.
The quick-service restaurant segment clocked growth of 7 per cent, while apparel and clothing segment clocked a growth of just about 6 per cent during the festival months compared to last year. Food and grocery sales were pegged at 5 per cent higher.