NEW DELHI: A recovering consumer sector in India is down to increasing demand from urban centres and the forthcoming festive season, according to a new report.
According to the Japanese financial services firm Nomura, Indian consumer firms are expected to report an average net growth in sales of 8.6% year-on-year, the Economic Times reported. This is largely down to the effects of macro issues on the household and personal care segments.
The third and fourth quarters of the fiscal year 2016-17 were hurt by the government’s move toward demonetisation. Later, the implementation of the GST (Goods and Service Tax) in Q1 2017 led to broad-scale destocking, further disrupting Q2 projections, Nomura said.
“Beyond all the macro issues,” the report added, “we believe growth remains on the right track.
"We expect a continued strong recovery in urban consumption and steadiness in rural consumption. We believe overall volume growth will likely pick up meaningfully in the coming quarters".
The largest gains, however, were in the retail sector, for which Nomura forecasts 16.4% revenue growth. "We expect growth recovery will happen in the second quarter of this financial year due to continued recovery in urban demand, trade inventory normalisation and the festive season," the company said.
A return to growth will do much to calm investors. Optimism around the future of retail is growing in the country, as a Cushman & Wakefield report suggested that the top 8 Indian cities will see close to 34 new malls built by 2020.
Leasing of mall space has seen an upward trend. In the period January-September 2017, mall space leasing was up 55%. Following a global trend, the tendency is now to rethink malls as destination rather than direct retail outlets.
Sourced from Economic Times, WARC