Industry association Retailers Association of India (RAI) said Diwali sales could top 2019 levels. RAI’s retail business survey shows that sales grew 19% from April to August 2022 compared to pre-pandemic or 2019 levels.
“The early trends indicative of the festive season have been encouraging for retailers and brands. The industry is expecting this season, which is without any covid-19 restriction after almost two years, to perform better than the festive season in 2019 (pre-pandemic)," RAI said in a note.
Eastern and northern markets have performed better with sales growth at 22% and 20% respectively. “...West and South markets have indicated a sales growth at 17% and 16% respectively, from April to August 2022 as compared to the pre-pandemic levels during the same period (2019)," it said.
Strong festive sales in eastern India during Durga Puja are a strong indicator of how the rest of the season will pan out. “Early signs have been indeed very encouraging as consumers are seen stepping out of their homes with their whole family - without any restrictions, wanting the feeling of cheer around them," the survey added.
RAI said consumer sentiment is buoyant. Consumers are not only shopping for themselves but also inquiring about gifting as socializing picks ups.
Retailers are betting on a strong festive season to help lift demand; this is especially true for categories such as apparel and premium electronics.
While categories such as Quick Service Restaurants (QSR), electronic goods, and sports goods continue to show steady growth, categories like garments, beauty and wellness, footwear and jewellery that were otherwise indicating a very near the pandemic levels growth in the past four months, have started showing decent growth, RAI said in its note.
“Earlier this year, buying behaviour during occasions, especially the wedding season, were showing an upward trend across income groups. A growth of ~20% to 25% over the pre-pandemic levels (2019) will be the right kind of growth despite inflation," said Kumar Rajagopalan, CEO, Retailers Association of India (RAI).
However, RAI said that the Ukraine crisis and high inflation could dampen demand especially among the lower-middle class.
