Indian retail sector shows modest growth of 5 per cent in December, overall consumption remains subdued

The Indian retail sector has witnessed a sales growth of 5 per cent in December 2024 compared to the same festive time period last year, according to the Retailers Association of India’s(RAI) 55th Retail Business Survey released on Monday.

The survey further reveals that South India experienced the highest sales growth at 6 per cent, while West and North India each recorded a 5 per cent increase. The sales growth in East India showed a growth of only 4 per cent.

The survey highlighted regional differences in growth, with North India leading the way at a 7 per cent increase in sales, followed by the West and South, both registering a 5 per cent rise in sales growth.

Observing the data, Kumar Rajagopalan, CEO, the Retailers Association of India (RAI), said, “RAI’s survey shows 5 per cent

growth in December. Inflation and other payment obligations for EMI etc. are continuing to weigh on discretionary spending. The wedding season provided some boost to categories like apparel and jewellery, but overall consumption remains subdued. Notably, QSR is showing early signs of recovery, offering a glimmer of optimism for the sector. With the Union Budget around the corner, the retail industry hopes for measures that address inflation and boost consumer confidence.”

The survey further reveals that South India experienced the highest sales growth at 6 per cent, while West and North India each recorded a 5 per cent increase.

In contrast, East India showed a growth of only 4 per cent, the survey added.

In terms of categories quick-service restaurants (QSR) registered the highest growth of 10 per cent, followed by apparel, food and grocery and sports goods each showing growth of 7 per cent compared to the December 2023 period last year, the survey added. The growth in QSR category reflects consumers’ prioritisation of food habits.

The jewellery segment also showed robust growth of 3 per cent, suggesting a rise in discretionary spending on luxury items. Meanwhile, categories such as consumer durables and electronics (2 per cent) and apparel and clothing (7 per cent) experienced moderate growth, indicating that consumers are making selective purchases.

The sales growth in the food grocery segment was recorded at 7 per cent while the footwear sales growth struggled at 3 per cent. The sales growth in sports goods recorded an impressive 8 per cent, as per the survey.

According to the survey beauty, wellness and personal care recorded a sales growth of 6 per cent.

The survey’s findings suggest that consumers are willing to spend where they perceive value, and this trend could shape the strategies that retailers adopt as they prepare for the festive season.