India's Retail Sales Rose 7% In June
North India has been the most impacted, with sales growing 5%.
India's retail sales remained muted in June as high inflation impacted consumer spending.
The country's retail sales grew 7% in June over the same month last year, according to data from the Retailers Association of India. This was on the same lines as in March, April, and May, suggesting continued pressure on consumer spending on account of high inflation.
North India has been the most impacted, with sales growing 5%. On the other hand, sales in the southern part of the country registered a growth of 8%, followed by east (7%) and West (6%), the RAI data showed.
Category-wise, furniture and furnishing saw the slowest sales growth of 3%, according to the apex body of domestic organised retailers. This could be because consumers have mainly cut back on discretionary spending.
Similarly, sales of clothing, consumer durables, and electronics grew 7% each in June over the previous year, while those of beauty and personal care, as well as quick service restaurant chains, grew 8% each.
Sales of white goods such as air conditioners, fans, and refrigerators also took a hit on account of poor demand due to unseasonal rainfall.
But consumers have boosted or maintained spending elsewhere, such as on sports goods. The segment grew 13% over the previous year, the monthly retail data showed. Other categories, like food and grocery and footwear, grew the most in June at 15% each.
Jewellery sales also grew at 14%, and this was reflected in the business updates of companies like Titan Co. and Kalyan Jewellers India Ltd. Despite considerable volatility in gold prices throughout the April-June quarter, the companies highlighted robust sales during Akshaya Tritiya in April and wedding-related purchases in June.
Retail sales saw healthy double-digit growth consistently over the past year, owing to pent-up demand after the Covid pandemic and a low base.
For instance, retail sales were up 23% in April 2022 compared with levels seen in the same month in 2019, while they grew 24% in May 2022. In June last year, retail sales witnessed 13% growth, according to RAI's data.
Most companies have yet to report their June quarter earnings.
However, a few, including Dabur India Ltd., Marico Industries Ltd., and Adani Wilmar Ltd., that have disclosed their business updates so far, revealed that the demand recovery has been uneven across categories as inflation continues to hurt pockets.
In packaged food, for instance, the categories that have seen a sharp price cut, like edible oil, have grown, while most other segments still lag. Fresh spurts in vegetable prices at the onset of the monsoon season have also upended household budgets.
In its first quarter earnings, DMart chain operator Avenue Supermarts Ltd. also pointed out that continued weak apparel demand is hurting profitability.
"As consumers are now getting into their normal business routines, we are witnessing moderate growth," Kumar Rajagopalan, chief executive officer at RAI, said in a statement. "We need to wait till the festival season to draw a definite conclusion."
