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Several companies in their Q1FY24 earnings statement have said that the demand environment remains challenging and firms are pinning their hopes on the festive season for a revival in spending. “When do we expect the demand to recover, I think definitely not before the festival period,” said Ashish Dikshit, MD at Aditya Birla Fashion and Retail, while indicating that a late onset of festivals and shift of wedding dates to later part of the year will delay the process of demand recovery. “… this time as you know, the festivals have also got pushed later into the year. They are about 20-30 days later than the same period in previous year… a lot of weddings have also gotten shifted to the second half of the year… that is an important piece for our premium brands as well as for the larger ethnic portfolio,” Dikshit said. Even the value-conscious customers in smaller towns restricted their purchases, weighing on the performance of the firm’s fashion brand Pantaloons.

For Shoppers Stop, apparel sales continue to be sluggish. “The retail market, particularly apparel, has been moderating since Diwali last year… our private brand sales largely remained flat (in Q1) due to tough market conditions,” MD & CEO Venu Nair said.
Referring to the industry-wide muted performance of the fashion segment, Nykaa’s executive chairperson, MD & CEO Falguni Nayar described the April-June quarter as an ‘odd’ one where companies could not do anything to pique the interest of consumers. “It almost felt like the customers were missing,” Nayar said.
Things are not looking up for the footwear segment as well. “On the discretionary spending front, demand remains subdued in the footwear sector, prolonging the deceleration that started towards the end of March 2023,” a Bata India executive said.
High inflation across industries and categories has led to a short-term impact on consumer sentiment and demand in the last few quarters, said Ravi Jaipuria, non-executive chairman at Devyani International, which operates brands like KFC, Pizza Hut and Costa Coffee. The firm indicated that consumers took to downgrading amid an inflationary environment, prompting companies to introduce value offerings. “… We are trying to build a value layer for KFC so that we can focus on the number of transactions and we are able to get more footfall in our stores,” company officials said.
For the Pizza segment, too, inflation doesn’t bode well. “Whenever there is high inflation, the pizza category gets impacted… there are cheaper QSR entry options ,” said CFO and director Manish Dawar. They expect demand to pick up only from the third quarter.
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