There has been double-digit growth in sales of clothes, air-conditioners, refrigerators and premium beauty products in the first two and a half months of the current financial year. Which is also an indication that people are now spending more on the things of their choice. However, companies have warned that monsoon irregularities and rising inflation may impact demand in the coming months.
Companies selling clothes reported a 12-14 percent increase in sales compared to last year, while companies making white goods said demand for cooling products increased by 17-18 percent due to the scorching heat. Last year, AC sales had declined and refrigerator sales had seen single-digit growth. Reduction in GST rates and stable prices of clothes have helped.
Better situation than last quarter
Strong demand for summer products has helped in the recovery amid increased geopolitical tension and inflation concerns due to the Iran War. Devarajan Iyer, chief executive of department store chain ‘Lifestyle International’, said in an ET report that sales in the current quarter have been very strong and have seen double-digit growth compared to last year. The improvement in consumption that we saw in January-March has become stronger.
Although demand has been good in recent months, industry officials have warned of the risk of poor rainfall could increase food prices, cause disruption in rural areas and reduce consumer confidence. India Meteorological Department has predicted less than normal rainfall this monsoon. A decrease of 46% was seen in the June figures.
increase in inflation
Meanwhile, a rise in inflation has been seen. Due to high prices of fuel and food items, it increased to 3.93% in May, which was 3.48% in April. Concerns about fuel prices may ease as conflict subsides in West Asia, but the threat of El Nino remains. Lalit Agarwal, managing director of V-Mart Retail, said in an ET report that there has been a good double-digit growth in sales in the current quarter, however, depending on the rain pattern and the movement of inflation, there may be problems in consumption now. A Bank of America report last week warned that “some risks remain to the outlook for retail inflation in India due to rising wholesale prices and rising El Nino risks.”
rapid improvement
Companies and analysts say that at present the demand remains good. BofA said it is not seeing any “obvious slowdown” in e-commerce parcel shipments to the value commerce market or to third-party logistics companies. The brokerage said it is “more bullish” on online travel and quick commerce. LG Electronics said that due to the improving sentiment, positive momentum has been seen in all categories like ACs, refrigerators, television sets and washing machines.
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