Retail sector stress shows demand recovery uneven

THE DECEMBER QUARTER earnings of the country's top two organised retailersReliance Retail and Avenue Supermarts-point to a shaky recovery in consumer demand.

- VIVEAT SUSAN PINTO

The weakness comes despite GST price cuts initiated during the festive season, which was expected to shore up spending, especially in urban areas. Rural demand, in contrast, has been resilient.

The uneven recovery raises questions about whether further stimulus may be needed to improve retail consumption in the forthcoming quarters, a point made by counterparts in FMCG too, who have reported mixed financial numbers in quarterly updates for the period.

Consider this: Reliance Retail reported its slowest profit (2.7%) and Ebitda growth (2.1%) in five quarters in Q3, hurt by not just a demerger of the FMCG business, but also muted consumer spending split over two quarters.