The retail sector’s festive sales growth failed to meet expectations this year, reflecting subdued consumer demand, according to the Retailers Association of India (RAI).
The sector recorded a modest 7% growth between October 7 and December 1, compared to the same period last year. This fell short of the anticipated 10% growth, as revealed in RAI’s 56th Retail Business Survey.
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“Consumption growth has been subdued throughout the year, prompting retailers to boost business through promotional offers and encouraging festive purchases,” said Kumar Rajagopalan, CEO of RAI.
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RAI, representing over 2,300 members with a combined 600,000 stores nationwide, highlighted varying performance across categories. Food and grocery saw the strongest year-on-year growth at 14%, followed by quick-service restaurants (QSR) at 10% and jewellery at 9%.
The broader slowdown in demand has been a recurring theme across industries. The Confederation of Indian Industry (CII) has called on the government to introduce measures in the upcoming Budget, including income tax cuts for those earning up to Rs 20 lakh annually and consumption vouchers for low-income households.
Margins for companies, especially in the FMCG sector, are under pressure, particularly in urban markets.
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RAI expressed optimism for 2025 but pointed to persistent challenges. “We are hopeful for stronger growth in 2025, as rising operational costs require a sustained growth trajectory to maintain profitability,” said Rajagopalan. He also flagged inflation, intensified competition, and constrained spending among the lower middle-class population as key hurdles.
Analysts said that with these concerns looming, the retail sector will be watching closely for policy support and consumer trends in the new year.
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