A survey conducted by the Retailers Association of India (RAI) in February 2024 reveals a modest 5 per cent Y-o-Y growth in retail sales compared to February 2023. The growth was particularly notable in specific categories, with sports goods leading at 9 per cent, followed by footwear at 8 per cent and Quick Service Restaurants (QSR) at 7 per cent.
Kumar Rajagopalan, CEO, RAI, notes, there is a cyclic pattern in consumer spending across categories and regions. Earlier showing a robust growth, the Eastern region experienced a decline in the current financial year.
Similarly, Consumer Durables and Information Technology (CDIT) products faced challenges in the last quarter despite a strong performance in the preceding quarters.
There is a growing trend amongst middle-class consumers to leverage easy finance options to stretch their budgets, affirms Rajgopalan. This has led to the recalibration of their spending, particularly adjusting for monthly installment outflows.
Regionally, growth rates varied amongst retail businesses compared to February 2023. The highest growth of 6 per cent was recorded in the West and South regions followed by 4 per cent in North India. Growth in East India trailed with only a 3 per cent growth.
The trend of modest growth persisted in previous months, with January also recording a 5 per cent increase. Despite the festive season, October and November only saw a 7 per cent growth, while December marked a slower 4% growth rate, making the last quarter of the year sluggish for retailers.
