Retail Sales Growth Slows In October Amid High Inflation

Retail sales rose in October aided by an early start to the festive season, albeit at a slower pace than last year due to high inflation.

Retail sales across the country were up 15% in October, as against 34% over the same period last year, amid celebrations of major festivals like Dussehra and Diwali, according to the latest monthly business survey by the Retailers Association of India.

The low double-digit sales growth indicates two issues: persistent high inflation cast a pall over the festive season, and revenge shopping is not sufficient to make up for the two years lost due to the Covid-19 pandemic.

Compared to October 2019 or the pre-pandemic period, sales grew 19%, the survey showed.

"The removal of pandemic-related restrictions has resulted in all-round growth of retail business across regions and categories," said Kumar Rajagopalan, chief executive officer at RAI.

"In order to understand the complete impact of the festival season on retail sales, it is essential to see the figures of October and November combined," he said. "We would await the results for November to draw definitive conclusions."

All the signs indicate a positive trend, said Rajagopalan.

This year, the growth is visible mostly in western India, which grew 25% over pre-pandemic levels, followed by east (18%), south (18%) and north India (14%), the survey highlighted.

All the four regions have seen growth between 11-20%, as compared to the previous year.

Within categories, luxury items such as sports goods grew 35% over last year, followed by consumer durables and electronics at 32%.

Other categories, such as jewellery and footwear grew 13% each, food and grocery grew 15%, while clothing and apparel grew 11% over the previous year.

Three categories—furniture and furnishings, quick service restaurants, beauty and personal care—grew in single digits, the survey showed.