Retail industry grows 11% in festive period on GST-driven value demand

The retail industry expanded 11 per cent during the 87-day festive window as consumers favoured value-driven categories under lower GST slabs, with apparel below Rs 2,500

Retailers Association of India (RAI) said that the industry reported 11 per cent growth during the 87-day festive period (August 1–October 26) compared to last year’s festive period (August 9–November 3, 2024) due to an increase in consumption under the GST Bachat Mahotsav framework.

 

What drove overall retail growth during the festive period?

 

According to RAI’s Retail Business Survey, consumers responded actively to value-driven categories that fell under the lower GST slabs.

 

“Apparel and footwear priced below Rs 2,500, both taxed at 12 per cent, recorded stronger traction, while premium apparel above Rs 2,500, which moved from 12 per cent to 18 per cent GST, saw moderated demand,” the report stated.

 

How did different retail categories perform?

 

Category wise, food and grocery, jewellery and footwear grew by 12 per cent, while sports goods grew by 11 per cent. Apparel and beauty and personal care saw a growth of per cent each.

 

Which regions recorded the strongest festive-period performance?

 

Region wise, west India led the charge with 13 per cent growth, followed by north and east growing at 10 per cent each, while south grew by 9 per cent.

 

RAI said in its release that the survey pointed out that the GST Bachat Mahotsav has sharpened consumer price awareness, helping retailers better understand buying thresholds — and plan inventory, pricing and engagement strategies accordingly.

 

Which segments outperformed during the festive period?

 

Quick Service Restaurants (QSRs) were among the top-performing segments in this period, signalling a rise in dining and consumption-led experiences, while furniture benefited from home improvement and festive refurbishment purchases.

 

“Retail began the year with 4–5 per cent growth and moved to 7–8 per cent through April–July. The GST Bachat Mahotsav helped lift festive-period sales into double-digit territory. Value-led categories, including apparel under Rs 2,500 and footwear in the 12 per cent GST slab, saw steady growth,” Kumar Rajagopalan, chief executive officer, RAI, said.

 

He added that however, apparel priced above Rs 2,500, which moved from 12 per cent to 18 per cent GST, showed comparatively lower traction. “This suggests that while consumers remained active, they were selective in discretionary spending at higher price points. Most other categories, including jewellery, benefited from seasonal and occasion-led buying. The industry will now monitor how this consumer preference evolves through the wedding and end-of-season period,” said Rajagopalan.