Indian Retail Sector Marks Modest Growth Amid Festive Season Challenges

The Indian retail sector witnessed a modest 5% sales growth in December 2024 compared to the previous year, driven by varying regional performances. South India led with a 6% rise, whereas East India lagged behind. Quick-service restaurants showed significant recovery, despite inflation affecting consumer spending.

The Indian retail sector recorded a 5% increase in sales this December, as compared to the same period last year, per the Retailers Association of India's 55th Retail Business Survey. The regional performance varied, with South India leading at a 6% growth while East India trailed with only a 4% increase.

RAI's CEO, Kumar Rajagopalan, highlighted the impact of inflation on consumer spending, stating that discretionary purchases remained subdued despite the wedding season's boost to categories like apparel and jewelry. The quick-service restaurant (QSR) segment, however, exhibited encouraging recovery, hinting at a positive outlook for the industry.

Category-wise, QSRs experienced a 10% growth, reflecting a shift in consumer priorities towards essential food habits. Apparel, food, grocery, and sports goods saw a 7% rise, while electronics and durable goods faced moderate gains. Such insights may influence retail strategies for the upcoming festive season, as the sector anticipates government measures in the Union Budget to strengthen consumer confidence.

(With inputs from agencies.)