While rural demand witnessed a slight uptick, urban consumption has remained largely unchanged, contributing to lower growth in 2QFY25.
The demand trends for the quarter reflected a subdued market, much like the previous quarter, and were further impacted by seasonal factors like the monsoons and religious observances such as ‘Shravan’ and ‘Shraadh.’
The retail sector, particularly apparel, displayed notable variation in performance. Value fashion continued to see strong demand reporting impressive revenue growth and same-store sales growth (SSSG).
Companies across the apparel industry are focusing on store rationalization to enhance margins, although net store additions may remain low in the second half of the year.
The jewelry sector saw strong revenue growth in 2QFY25, driven by the reduction in customs duties, which spurred demand. However, margin pressure remained due to higher discounting, particularly in studded jewellery, and increased competition. While the reduction in customs duty led to an inventory loss for many players, a rise in gold prices helped offset some of these losses. The wedding season and festive spending in 3QFY25 are expected to boost sales further, providing optimism for the rest of the year.The rise of online delivery platforms and local competition led to weaker dine-in demand, though delivery services performed better. To counteract this trend, several QSR brands launched customer deals and value-for-money offerings to stimulate demand.
The travel sector saw moderate growth in 2QFY25 despite the traditionally non-peak quarter. The travel and hospitality businesses benefited from steady growth, especially in the forex business. However, the DEI (Domestic & International Events) business witnessed a slight decline in revenue.