Truth that Matters. Stories that Impact

Truth that Matters. Stories that Impact

Business

India Retail Sales Rebound to 6.8% in July After Q1 Slowdown: RAI-Innoviti SANKET Report

India’s retail sector experienced a rebound in July with like-for-like sales growth reaching 6.8%, reversing a downward trend seen throughout the first quarter of the financial year, according to the latest RAI-Innoviti SANKET report. The report, jointly released by the Retailers Association of India (RAI) and Innoviti Technologies, tracks per-store consumer spending across categories, geographic zones, and payment modes.

What Happened

The joint study measures same-store retail performance by comparing sales from existing stores against the corresponding month from the previous year, filtering out growth generated solely by opening new stores. The compiled data shows that retail expansion slowed sequentially from 9.4% in April to 7.8% in May and 4.7% in June, before registering its first month-on-month improvement of the period in July at 6.8%.

The underlying findings are derived from more than 50 million data points across over 2,800 cities. The dataset incorporates primary survey inputs, publicly reported data, and metrics from consenting businesses, utilizing artificial intelligence to correlate consumer spending patterns with macroeconomic developments.

Key Highlights

  • Overall Trajectory: Retail growth decelerated through April (9.4%), May (7.8%), and June (4.7%) before rebounding to 6.8% in July.
  • Category Variations: Jewellery experienced the widest fluctuations, registering 14.2% growth in April during Akshaya Tritiya, dropping to 4.6% in May, and settling at 6.6% in June and 6.4% in July. Grocery held steady at around 7% before dipping to 4.3% in June amid a 16-month high in food inflation, then climbing to 7.5% in July as monsoon rains eased supply constraints. Discretionary segments, including consumer electronics and fashion, stayed positive throughout the period and strengthened in July.
  • Regional Performance: All four geographic zones experienced softening in the first quarter followed by a July recovery. The Southern zone proved the most resilient across all four months, while the Western zone recorded the steepest slowdown in Q1 alongside the sharpest rebound in July.
  • Tier Dynamics: Tier 3 cities outpaced Tier 1 metro markets through the quarter, with their growth lead expanding from 0.7 percentage points in April to 2.4 points in June, before narrowing to 1.9 points in July as metro demand recovered.
  • Payment Preferences: UPI transaction growth continuously surpassed payment cards, posting 22% growth in April (versus 4.6% for cards), 12% in June (versus 0.7% for cards), and 14% in July (versus 3.2% for cards). Card usage remained focused on high-ticket jewellery purchases, whereas UPI dominated grocery transaction volumes.

Why This Matters

According to RAI CEO Kumar Rajagopalan, monitoring same-store demand is crucial to understanding whether the retail sector is experiencing authentic demand growth or merely expanding its physical footprint. The findings indicate that discretionary spending on lifestyle and electronics remained stable, while retail economic activity expanded deeper into smaller towns.

Innoviti Technologies CEO Rajeev Agrawal noted that the data reveals structural changes in consumer behavior, notably a long-term shift toward UPI across both low-value and higher-value purchases, alongside steady demand across non-metro markets.

What to Watch Next

The monthly SANKET reports will continue to monitor whether the demand recovery in Tier 1 metropolitan areas sustains momentum to close the growth gap with smaller cities, alongside tracking ongoing shifts in payment methods and category-specific spending trends.

Frequently Asked Questions

What is the RAI-Innoviti SANKET report?

It is a retail index produced by the Retailers Association of India and Innoviti Technologies that tracks like-for-like, same-store consumer spending across multiple retail categories, cities, and payment types in India.

How does the report calculate like-for-like growth?

The report compares current-month sales figures with the exact same month from the prior year at existing stores, deliberately excluding the revenue impact of newly opened retail outlets.

Which retail categories showed the strongest recovery in July?

Grocery sales rebounded sharply to 7.5% in July after food inflation pressures eased, while consumer electronics, fashion, and jewellery maintained steady positive growth.

Source: Retailers Association of India (RAI) and Innoviti Technologies