Retail sales up 5% in January, below expectations

New Delhi: Domestic retail sales in January grew 5% year-on-year with categories such as quick service restaurants, food and grocery and jewellery benefitting from strong consumer demand during the month, according to a monthly survey of retailers.

Sales also saw a sequential increase, with a 4% growth in December, yet they fell short of overall expectations.

“January sales were below expectations. Though retailers showed overall growth thanks to expansion, many have said that they did not witness growth on same stores sales,” said Kumar Rajagopalan, chief executive, Retailers Association of India, without detailing the anticipated sales growth.

The wedding season contributed to the growth in jewellery, food, and grocery sectors, but growth in other categories was limited, Rajagopalan said, adding that demand for apparel and electronics was subdued.

Geographically, sales in northern India increased, but many retailers in the east and south reported declines due to weak demand for discretionary items, he said.

In terms of specific sectors, consumer durables and electronics saw a 1% decline in year-on-year sales for January, while apparel sales rose by 2%.

Year-on-year sales growth for consumer durables and electronics fell 1% in January, while apparel sales reported a 2% growth in the same period.

“Even CDIT (consumer durables and IT) retailers have found the month of January to be challenging for growth. Many garment retailers have found growth challenging in spite of it being discount season for non-occasion wear garments,” said Rajagopalan.

Retail sales typically slow down after the October to December festival season, and apparel retailers start sales in January to clear out winter inventory.

Businesses across regions indicated year-on-year sales growth, with retailers in western India reporting a 6% increase, and the north and south each seeing a 5% rise. The eastern region lagged with only a 3% growth, as per the survey.

Category-wise, quick service restaurants, food & grocery, and jewellery each saw a 9% increase, followed by sports goods at 8% and beauty products at 6%, compared to January 2023 sales.