Retail sales in July 2025 rose by 8% year-on-year, marking the third straight month of 7–8% growth. This consistent rebound from the sluggish 3–5% levels earlier in the year reflects a steady improvement in consumer sentiment, with households beginning to loosen their purse strings for discretionary spending.
As the festive and wedding season approaches, retailers remain cautiously optimistic. The upcoming quarter, traditionally seen as the barometer of consumer demand, will be crucial in determining whether the current momentum can be sustained.
In 2024, festive sales grew by 7% during October–November but moderated to 5% in December. Categories such as food and grocery, QSR, jewellery, and consumer durables drove growth, while automobiles and white goods lagged as buyers held back in anticipation of tax changes. Meanwhile, inflationary pressures and EMI burdens continued to weigh on household budgets, shaping more cautious spending patterns.
For 2025, expectations are closely linked to GST reforms. The introduction of a simplified two-slab structure and the removal of inverted duty in textiles have been widely welcomed, creating greater clarity for businesses. These reforms are expected to boost consumption across categories such as food, CDIT (consumer durables and IT), and more.
However, concerns persist. Garments and footwear priced above ₹2,500 now fall under the 18% slab, mobile phones remain taxed at 18% despite being considered essential, and the high GST on commercial rentals continues to strain the working capital of lakhs of small and medium retailers. Balancing these factors, the upcoming festive quarter will be critical in shaping overall retail performance for the year.
