Nearly three-fourths of the sales growth was price-led, reversing the historic trend of volumes driving a bulk of sales, indicating that better-off consumers are driving the recovery, as per the RAI report that surveyed the top 100 retailers from modern retail across segments.
“This indicates that consumers are spending despite inflation and recovery cannot be understated,” said Kumar Rajagopalan, chief executive officer of RAI. The well-heeled spent significantly even as the value segment for the lower middle class has been under pressure,” he added.
Sports goods, footwear and QSR posted the highest growth between 25-30% while furniture, beauty, wellness and personal goods saw lower growth of 7-11%.
Increasing awareness about fitness and surging demand for athleisure wear helped the segment while the increasing travel boom led to people spending more on casual wear, industry executives said.
“Consumers, especially in smaller towns, are adopting athleisure even after the pandemic,” said Abhishek Ganguly, managing director of sportswear brand Puma India.
Consumer demand for daily groceries and essentials had taken a beating last year due to all-time high inflation, increase in product prices, rise in interest rates, and people prioritising their spending. However, apparel and lifestyle retail has been one segment that has bucked the trend due to pent-up demand and consumers upgrading their wardrobes after offices opened up.
“Consumers have been through very difficult times during Covid. I think coming back and re-engaging with brands on a retail level has been super important,” said Ramprasad Sridharan, managing director of fashion brand Benetton India.
According to the RAI survey, retail businesses across regions have indicated growth in sales – with the east region posting a 20% growth during April-January and the west growing 18%. North and south India grew 10% each compared to pre-pandemic levels.
“This year, performance has reset the base and while the growth from now on might not be the same, we still expect the industry to grow 10-15%,” said Devarajan Iyer, CEO of fashion retailer Lifestyle International. “We have also witnessed one of the best growth this fiscal.”
For shopping malls, December 2022 was the best in a decade as the sales momentum from the festive season continued.
“There is money in hand for both businesses and salaries class. All the businesses have done well and there is money to spend and retail has been the biggest beneficiary of that,” said Pushpa Bector, executive director at DLF Retail which operates premium malls across Delhi-NCR. “In our case, we have seen 25% growth. Brands might not expand as aggressively as they did last year, but they are investing in stores and expect good sales going forward,” she said.
Magicpin, a platform that helps retailers get footfalls and convert them into sales, said the last 10 months have been phenomenal and the growth is here to stay.
“While e-commerce is growing, it is only 10% of the retail industry,” said Anshoo Sharma, CEO and cofounder of Magicpin. “Offline retail will continue to grow at a steady pace. Post Covid, we saw revenge shopping. Things have settled down now and people still want to go out for the experience.”
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