The Decline of Revenge Shopping: A Prolonged Slump in Consumer Sales Growth

The Retailers Association of India (RAI) has recently released a report indicating a slowdown in consumer sales, particularly in the apparel and footwear sectors. This decline has been attributed to a decrease in same-store sales growth (SSG), which measures the revenue from stores that have been operational for at least a year. The RAI’s report revealed that the October to December period, traditionally known for increased sales during festivals, only saw a modest growth of 6%. This decline is significant as it marks the end of the revenge shopping trend that emerged during the pandemic.

Devarajan Iyer, Chief Executive of Lifestyle International, expressed that the slowdown in sales has lasted longer than anticipated, with many brands attributing their limited growth to expansion into new areas. The report also highlighted that the pandemic led to a surge in athleisure wear and wardrobe upgrades, but this trend has now stabilized.

Additionally, the value category, consisting of budget-conscious products, was the most affected by the decline in consumer sales growth. This category has not yet reached its pre-pandemic average sales level per square foot, further emphasizing the prolonged market slump.

RAI’s report also indicated that while apparel and clothing sales grew at a slower pace of 8%, quick-service restaurants (QSR) expanded by 13% in 2023. Other segments such as furniture, sporting goods, and jewellery experienced growth, while premium products and the trend of premiumization remained strong.

Kavindra Mishra, the CEO of Shoppers Stop, observed that while the market has displayed some signs of recovery after Christmas, it remains inconsistent and muted. The non-apparel segment, including beauty, has been performing relatively well, and it is anticipated that premium brands and the journey towards premiumization will continue to gain momentum.

In conclusion, the decline in consumer sales growth can be attributed to various factors, including inflationary pressures, job losses, and reduced frequency of eating out. This decline has been widespread across the retail space and other macro indicators, signaling a challenging demand environment.

Overall, the future of consumer sales growth remains uncertain, with industry experts and executives projecting a recovery only after two to three quarters. Consumers have shifted their spending priorities, and the retail sector will need to adapt to these changing trends to regain momentum and growth.