Retail Sales Growth in India Slows to 2% in July 2024

New Delhi, Aug 20 (KNN) In a concerning trend for India's retail sector, sales growth further decelerated to just 2 per cent year-on-year in July 2024, according to the latest data from the Retailers Association of India (RAI).

This marks a significant slowdown from the 5 per cent growth observed in June and 3 per cent in May, highlighting the challenges faced by retailers across the country.

The RAI report reveals a mixed performance across various retail segments. While food and grocery sales showed a relatively robust increase of 6 per cent, other categories struggled to maintain momentum.

Apparel sales managed a modest 3 per cent growth, and beauty, wellness, and personal care products saw a marginal 2 per cent rise. Quick Service Restaurants (QSRs) experienced a sharp slowdown, with sales growth of just 1 per cent.

Consumer durables, despite strong performance during the summer months, also saw growth taper off to 1 per cent. More worryingly, furniture and furnishings, along with sports goods, slipped into negative territory with declines of 2 per cent and 1 per cent respectively.

Regionally, West India led with 3 per cent growth, followed by South India at 2 per cent, while North and East India both registered 1 per cent increases.

Kumar Rajagopalan, CEO of RAI, expressed concern over the trend, stating, "The retail sector in India is facing challenges as businesses are yet to witness real growth compared to previous year.

Most of the retailers are stating that they have negative growth on a like-for-like basis, which is a cause for concern."

Industry leaders echo these sentiments. Jagdish Bajaj, CFO of Aditya Birla Fashion & Retail, noted in an analyst call that the overall consumption environment remains weak.

He cited factors such as a subdued wedding season and prolonged heat waves as contributors to reduced consumer activity, particularly in the apparel market.

Arvind Fashions' MD & CEO also pointed to the impact of elections, extreme heat, and fewer wedding dates as reasons for decreased traffic across both offline and online channels during the April-June quarter.

However, some retailers are cautiously optimistic about potential recovery, especially in rural markets. Lalit Agarwal, MD of Vmart, reported seeing "some green shoots" and noted improvements in both rural and urban markets, though he cautioned that the recovery is not uniform across the industry.

In response to these challenges, the RAI has called for stakeholders to implement strategies aimed at reinvigorating consumer demand and fostering long-term growth in the retail sector.

As India's retail landscape continues to evolve, industry watchers will be closely monitoring whether these "green shoots" develop into a more robust recovery in the coming months.

(KNN Bureau)