Retail sales in May grew by 3% compared to May 2023 levels, driven by consumer spending on food, grocery, consumer durables, and electronics, according to the 'Retail Business Survey' by industry body Retailers Association of India.
"While consumer spending on non-essential items remains cautious, categories such as food, grocery, and consumer durables have shown positive growth trajectory," RAI Chief Executive Officer Kumar Rajagopalan said.
"Retailers are looking forward to business post-election season. Budget in July will hopefully provide much-needed incentives to bolster consumer confidence and support further growth in the retail sector," he said.
Retail businesses across regions have indicated growth in sales compared to May last year, with south India showing the highest increase at 4%, followed by the east and west India at 3% each, and north India at 2%.
Among categories, food and grocery as well as consumer durables and electronics reported a growth of 6% each, followed by quick-service restaurants, which showed a growth of 5% compared to May 2023 sales level.
The findings come as the central bank has observed that retail inflation is gradually easing, but volatile and elevated food prices are interrupting the path of disinflation.
An article on the 'State of the Economy', published in the June 2024 bulletin, said that global growth was resilient in the first quarter of 2024, and many central banks have pivoted towards a less restrictive monetary policy stance in response to the fall in inflation in their economies.
"Headline inflation is gradually easing, driven by sustained softening of its core component, although the path of disinflation is interrupted by volatile and elevated food prices," the authors said.
Earlier this month, the RBI's monetary policy committee voted to keep the policy repo rate unchanged at 6.5% and reiterated its stance of remaining focused on the withdrawal of accommodation to ensure that inflation progressively aligns with the target while supporting growth.
India's retail inflation eased to the lowest since May last year, led by continued reduction in fuel cost and steady food prices.
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