YearEnder 2023- The retail industry gets its booster dose 

YearEnder 2023: The retail industry gets its booster dose 

As Covid-19 cases ceased, it was perhaps the retail sector which benefitted the most, as consumers returned to brick-and-mortar stores. Infact, experts believe that this year has been a turning point for the retail industry. “The Indian retail industry which was valued at $836 billion in FY22 has clocked a growth of 34% in FY23. The retail growth was led by strong growth in sports goods at around 41% and QSR (quick service restaurant) at 39%. India is currently in the top five retail markets in the world and is expected to be the third largest by 2030,” Anand Ramanathan, partner, consumer industry leader, consulting, Deloitte India, told BrandWagon Online.Continue reading this story with Financial Express premium subscriptionSubscribe NowAlready a subscriber? Sign in

The overall offline retail sales were over $1.6 trillion across India in 2022, as per data by market research firm, Statista. In addition, traditional retail had the highest sales of $750 billion in 2022. By 2030, traditional retail is likely to increase to $1.38 trillion, the report further stated.

Industry experts opine that so far this year, footfall across malls has gone up by six to eight percent. Meanwhile, it is believed that August turned out to be the most visited month for shopping malls due to occasions such as Independence Day and Rakshabandhan. Interestingly, shoppers spent the most on food and beverages besides apparel. Furthermore, in total 82% of consumers visited malls. Of this, 73% of consumers went to watch movies and 56% went to dine, as per Deloitte−SCAI report. “Our portfolio saw an expansion in fine jewellery, premium cosmetics and accessories, and luxury watches, in addition to fine dining, lounge and resto-bar. In short, the focus of these additions and expansions has all been in premium and bridge-to-luxury categories,” Abhishek Bansal, executive director, Pacific Group, added.

Case in point: ace turtle, which has the licences of brands including Lee, Wrangler, Toys“R”Us and Babies“R”Us for India and other South Asian markets, claimed that it has achieved the highest annual sales for denim brands Lee and Wrangler in FY23 when compared to the last 25 years. “We grew the sales of both the brands by more than 100% in FY23 over FY22. In FY24, we aim to grow by over 50% over FY23. While we aimed to grow by a higher percentage, due to a delayed uptick to the festive season this year, the growth was slower than expected,” Nitin Chhabra, CEO, ace turtle, explained.

According to the company, offline channels account for 50% of the sales. Offline outlets include single-brand as well as multi-brand retail outlets. The remaining 50% comes from online stores including lee.in, wrangler.in and online marketplaces such as Amazon and Flipkart.

Experts believe that while the pandemic is one reason, the increase in per capita income of Gen-Zs, is another, as more and more flock to urban cities. Secondly, the launch of physical stores has allowed to create a phygital experience. For example, Reliance-owned Tira beauty has launched an experiential store in Mumbai’s Jio world drive with AI-powered consoles, beauty vending machines, and make-up try-on stations, among other facilities. “In the last quarter, we expanded our footprint with the opening of 23 new stores, enhancing our market share in the mid-premium segment. Embracing diversity in our offerings, we ventured into the footwear and athleisure category, introducing 30 new products. By the end of FY24, we aim to open five brand outlets. We are poised to target revenue of Rs 1,000 crore in the coming years,” Deepak Bansal, director, Cantabil Retail India, said.

And the year ahead?

Experts believe that the outlook for 2024 remains positive. Moreover, as per industry stakeholders, the like-to-like (growth is a measure of growth in sales, adjusted for new or divested businesses) growth is anticipated to increase by 12-15% next year. “India’s GDP (gross domestic product) is projected to grow around seven percent this year and is expected to remain the same in 2024. With increasing disposable income in cities, we anticipate a rise in retail consumption in the coming years,” Bansal of Pacific Malls added.

Meanwhile, experts opine that some of the trends in 2024 will include investment in technologies such as AR/VR (augmented reality/virtual reality), generative AI (artificial intelligence), the rise of new commerce, increased penetration of e-commerce in tier-2 and tier-3 cities. “Delivery and commerce space has also been coming up with new and innovative models by the minute to gratify the customers. E-commerce has been on the rise in India and the online penetration of retail is expected to reach 10.7% in 2024, up from 4.7% in 2019,” Ramanthan explained.

However, going forward the share of consumer wallets will be split between categories such as hospitality and travel and other leisure activities. “We feel by next year’s festive season, the discretionary spend on retail will increase as compared to 2023,” Chhabra noted.

In Deloitte’s report titled, ‘Recognising malls and shopping centres as a new-age industry’ report in partnership with SCAI (Shopping Centres Association of India), Deloitte stated that organised brick-and-mortar retail, a considerable part of which are malls and shopping centres, is expected to grow at a rate of approximately 17% CAGR (compound annual growth rate) between 2022–2028 than the overall retail market.

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