Retailers Pin Hopes on Festive Season for a Boost in Demand
As discretionary spending remains subdued, retailers across India are eagerly anticipating the upcoming festivities and wedding season to drive demand in the second half of the year. The prediction of a good monsoon, which typically results in increased cash flow for individuals employed in the farming sector, is also expected to contribute towards a surge in consumption.
Although there were glimpses of growth in consumption towards the end of the March quarter, a full recovery is still awaited. The impact of the spending slowdown is most noticeable in lower-income households, affecting the mass market segment, while premium segments continue to perform well.
Joy Alukkas, Chairman and Managing Director of Joyalukkas Group, highlighted that the mass segment, burdened by economic pressures, is exhibiting cautious spending patterns. Kumar Rajagopalan, CEO of Retailers Association of India (RAI), emphasized the importance of the lower-income strata in driving market demand.
Industry experts are closely monitoring the upcoming budget for announcements that could potentially stimulate consumption. Middle-income households, particularly those earning between Rs 5-8 lakh annually, are facing financial strains, according to industry executives.
V S Ganesh, Managing Director at Page Industries, expressed optimism about a gradual improvement in demand in the later part of the year, citing factors such as a good monsoon and robust industrial output.
A recent study by Deloitte India revealed that a significant portion of respondents intended to reduce spending on apparel and footwear in the coming months. Accessories like watches and jewelry witnessed the least interest in increased purchase frequency.
Anand Ramanathan, Partner at Deloitte India, warned about the challenges in reviving the mass segment quickly and sustaining growth in the premium segment. Meanwhile, Paritosh Tiwari, Head of Retail at Raymond Lifestyle Business, noted fluctuations in consumer spending due to external factors like a heatwave and national elections.
In conclusion, retailers are now gearing up for a potential turnaround in demand with the upcoming festive season and weddings. As the market dynamics evolve, it will be crucial for retailers to adapt their strategies to meet changing consumer preferences and navigate economic uncertainties effectively.
