A look at how the year 2023 has been for retail in India
The year 2023 was a mixed bag for retail in India marked by aggressive expansions on one hand and sluggish sales on the other. While there were reasons to cheer for as an industry, there were also moments of concern.
Here’s a roundup of the good and the bad in 2023.
The bad
The year 2022 was marked with accelerated growth perhaps because of revenge shopping. Now that the spree has ended, retailers across categories say that this year has been subdued in comparison. IndiaRetailing spoke to a wide spectrum of retailers earlier in the month to find out the reasons behind the same. Click here to read what they said.
“2023 has been one of the worst seen in recent times. Retail sales have been subdued, even during the festive period as well as the end of season sales,” Rahul Mehta, chief mentor, Clothing Manufacturers Association of India (CMAI) speaking about the apparel sector.
“What has made it more challenging is that the expectations were fairly high, resulting in a good build-up of inventory. The poor cash flow is a worse problem for the industry,” Mehta added.
Findings of the Retailers Association of India’s (RAI) recent survey echoed Mehta’s sentiment with like-for-like store business during October-November being negative for more than 50% of the retailers surveyed. “Retailers had anticipated double-digit sales growth during the Puja and Diwali seasons in October and November 2023 however, the sales growth has been muted for many retailers,” said RAI chief executive officer Kumar Rajagopalan in the statement.
“Most retailers have indicated that the footfall was not even equal to 2022 though the sales were just about the same as the previous year. Many retailers, especially in the apparel category, only grew over last year because of new store openings and online sales,” added Rajagopalan speaking about the year.
The good
Store openings: The year was a remarkable one when it came to expansion. IndiaRetailing alone reported about 1143 store openings from January to 27 December including kiosks, container stores, shop-in-shops and large format stores. Of these, 420 were opened by Bestseller India. From Jan to May, Croma had opened 58 stores.
A majority of the stores opened by various retailers were in South India and a substantial number were in small towns and cities like Palanpur (Gujarat), Palakkad (Kerala), Surat (Gujarat), Vijayawada (Andhra Pradesh), Siliguri (West Bengal), Ayodhya (Uttar Pradesh) among numerous others across the country.
Launch of big box stores: Also, several brands launched their largest stores this year. For instance, Value Zone Hyper Mart opened a store of 1 lakh sq. ft. store in Bengaluru; Nature’s Basket launched its largest store of 12000 sq. ft. at Phoenix Palladium, Lower Parel, Mumbai. Toys”R”Us opened its biggest high street store (12,000 sq. ft.) in Bengaluru; Zudio launched its largest store (15,000 sq. ft.) in North India in Jaipur.
Wrangler opened its world’s largest store at Indiranagar in Bengaluru.
Other brands that opened their largest stores either in a particular region or in the country include Louis Vuitton, Mango, Muji, The House of Rare, Rare Rabbit, Pantaloons, Max Fashion, Allen Solly and Samsung.
Mall launches: The year saw the launch of seven big box mall launches across the country covering about 5.9 million sq. ft by leading mall operators with one mall being launched on an average every month since August. These include Pacific Premium Outlets Mall, Jasola in February, (3 lakh sq. ft.); Forum Kochi in August (6.5 lakh sq. ft.); Lulu Mall Hyderabad (5 lakh sq. ft.) and Phoenix Mall of the Millennium (1.1 million sq. ft.) in September; Phoenix Mall of Asia, Bengaluru (1.2 million sq. ft.) in October; Jio World Plaza in November (7.5 lakh sq. ft.) and Lulu Mall Palakkad (1 lakh sq. ft.) in December. Read more about the hottest mall launches of the year here.
Foreign brands entering India: Several foreign brands entered the country this year through various partners like Reliance Brands, Apparel Group and Myntra among others. Some of the brands that made their India foray in 2023 include Anne Klein, Oasis, Next, Victoria’s Secret, Chimi, Nars Cosmetics, Skin Story, Swiss chocolate brand Läderach; La Vie En Rose; Voir haircare, Dockers, Anko and MonaB among several others.
The trends
The year saw several trends like family entertainment and food & beverages (F&B) gaining more importance in shopping centres; ONDC going mainstream and gaining ground; early end-of-season sales; and more direct-to-consumer brands opening pop-up stores or kiosks in malls among others.
“In 2023, the retail sector witnessed transformative trends, notably omni-channel retail and the rise of Direct-to-Consumer (D2C) models. Despite challenges, new brands emerged, leveraging online platforms,” said Rajagopalan of RAI summarising the key trends.
“Shopping malls evolved into key retail spaces with effective customer engagement strategies. The shift towards digital transactions marked a significant change from traditional practices,” he added.
