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retail | IST

Retail sales hit pre-pandemic levels during Diwali; rising raw material cost remains a concern

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After losing nearly Rs 25,000 crore in annual sales during the pandemic, retail sales are back to pre-pandemic levels.

Diwali turned out to be the much needed boost for the fashion and lifestyle retailers. After losing nearly Rs 25,000 crore in annual sales during the pandemic, retail sales are back to pre-pandemic levels.
This is encouraging retailers to go full throttle on expansion plans, from launching new brands to opening new stores.
But not all's well. Despite recovery in demand, rising raw material prices is a concern. Cotton and yarn prices have been volatile in the last year, with a near 50 percent increase in certain categories. Besides, numerous mid and small textile mills that could not survive the onslaught of the lockdown have closed down, severely impacting supply of inventory to these retailers. A consequent hike in apparel prices is inevitable say retailers.
Rising cost is also reducing the retailer's ability to offer discounts, and a supply crunch could mean shorter end-of-season sales. While this could mean brick and mortar retailers further lose favour over online players, retailers are betting on rising discretionary incomes of shoppers and say high conversion rates at stores are proof of that.
Watch video for more.