Festive Sales Boost Missing on low Consumption Demand: Retailers Association

Bengaluru: The festive season has failed to boost consumption demand in recent months, indicating slowdown in urban growth.

Retailers Association of India (RAI) has released the 56th Retail Business Survey, reporting a 7 per cent growth in the retail sector from 7 October 2024 to 1December 2024 compared to the same last year.

“RAI’s survey indicates a moderate growth of 7 per cent during the October-November festive season, falling short of the anticipated 10 per cent. Consumption growth has been subdued throughout the year, prompting retailers to boost business through promotional offers and encouraging festive purchases. We are hopeful for stronger growth in 2025, as rising operational costs require a sustained growth trajectory to maintain profitability. Inflation, intensified competition, andlimited spending, particularly by the lower middle-class population, remain significant challenges,” said Kumar Rajagopalan, CEO, Retailers Association of India (RAI) in a press release.

The survey further reveals that West India experienced the highest sales growth at 8 per cent, whileNorth, South, and East India each recorded a 7 per cent increase.

“In terms of categories, food and grocery registered the highest growth of 14 per cent, followed by10 per cent in QSR and 9 per cent in jewellery compared to the same festive time period last year,” RAI said.

Consumption growth in India has slowed down in the second half of the year as indicated by the high frequency indicators.

Both manufacturing and services activities, which are closely linked to consumption, have seen a drop, as indicated by the trend in the PMIs. Retail sales, a key indicator of consumer demand, slowed further in the second quarter of FY25 when compared to the first quarter.