‘Lower price points gaining traction after GST cuts’

Bata India sees demand at the belly of the market bouncing back after the GST reduction on products up to ₹2,500 from the earlier 12% to 5%.

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MD& CEO Gunjan Shah tells Viveat Susan Pinto that he sees a structural demand correction in the near term due to the GST cuts. The footwear retailer, which has over 1,970 stores, has also put in place a three-pronged strategy to drive growth. Excerpts:

While Bata’s Q2 earnings were impacted by GST disruptions, what has been the scenario post September 22? How much of a rebound are you seeing in sales?

We have seen a noticeable uptick in sales after September 22. Demand at lower price points, which was sluggish over the last two years, has been gaining traction with the GST cuts. We were also quick to pass on the benefits to consumers across 80% of our product portfolio, which is priced under ₹2,500. Almost 40% of this is priced under ₹1,000. So, the GST cuts have made footwear even more affordable at lower price points. The shift from unorganised to organised footwear will also accelerate with the GST reforms.