Indian retail sector concludes FY26 with 10% Y-o-Y sales growth
23 April 2026, Mumbai
The Indian retail industry concluded the FY26 on a stable trajectory, recording a 10 per cent Y-o-Y increase in sales this March. According to the latest Retailers Association of India (RAI) business survey, this performance marks a six-month period of consistent growth, maintaining a steady pace between 9 per cent and 10 per cent. The gains were geographically widespread, with North and West India leading the expansion at 11 per cent, while the South and East regions followed closely. This growth was primarily driven by essential and lifestyle categories, specifically food and grocery, which increased by 14 per cent, and apparel, which grew by 13 per cent. The Quick Service Restaurant (QSR) and jewelry sectors also maintained double-digit momentum, signaling sustained consumer appetite for mid-range discretionary spending and essential commodities despite a volatile global economic climate.
Strategic pivot to precision as margin pressures define the 2027 outlook
While top-line revenue remains positive, the retail landscape is shifting from a focus on sheer scale to one of operational precision. Consumer durables faced significant headwinds, growing by only 1 per cent as households continued to delay major capital expenditures. This caution is being met with rising operational challenges, as retailers grapple with escalating expenses in energy, logistics, and real estate rentals that are currently compressing profit margins. RAI leadership suggests, the modern consumer has become more ‘purposeful,’ with physical footfalls moderating but conversion rates improving. As the industry enters the FY27, the strategy for major players is shifting toward localized assortment and sharper value positioning to navigate persistent inflationary pressures and a more discerning domestic buyer.
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