03 February 2023, Mumbai
Prices of clothes and footwear have risen consistently over the last three years in India, contributing majorly to inflation.
During fiscal year 2023, food and beverages, clothing and footwear, and fuel and light were the major contributors to inflation—the first two contributing more this fiscal than in the previous one. Average annual retail inflation for clothing and footwear as a category stood at 1.6 per cent in fiscal year 2020, touched 3.4 per cent in fiscal year 2021 before more than doubling to 7.2 per cent.
In fiscal year 2023, average annual retail inflation in clothing and footwear is 9.7 per cent. The sector was significantly impacted at the onset of the pandemic when mobility restrictions shuttered malls and markets. As a result, retailers were left with held-over inventory; meanwhile, fashion trends changed too prompting consumers to buy more casual clothing. However, with improved mobility, apparel and footwear retailers are now swiftly expanding their footprint.
Large apparel retailers are expected to grow at 25 per cent to 30 per cent this fiscal compared to ten per cent to 15 per cent for their small and mid-sized counterparts. India’s inflation rate peaked in April 2022 at 7.8 per cent before moderating to 5.7 per cent in December 2022 on the back of good monsoons as well as measures that ensured adequate food supply.