Food inflation hits India's fashion retail sector as sales decline and discounts increase
₹200 per kg since June, while those for onions, another staple in Indian cooking, have risen 80% in some areas like New Delhi. Food inflation for July hit a staggering 11.5%, far more than 4.6% in June and marking a three-year high. As purse strings tighten, the pain felt by India's clothing and shoe retail sector - worth an estimated $62 billion in 2022 according to Euromonitor International.
According to a report by Reuters, at a Zink London outlet in a Mumbai mall, staff at the domestic women's clothing chain have been calling 10 customers each per day and sending product pictures via WhatsApp in an effort to bolster sales. Several other fashion outlets across four Indian cities painted a similar downbeat picture. Shoe retailers like Japan's Asics and Skechers USA have been offering steep discounts, some as much as 70%, far bigger than normal, and have also been extending their sale periods, the news agency added.
The downturn in fashion spending has also been accompanied by a slide in spending at restaurant chains like Domino's. "The biggest threat to India's growth will come from private consumption, which constitutes about 60% of GDP, which is weak already," Deutsche Bank economist Kaushik Das wrote in a report this month. The bank has forecast India's economy to log slower growth of 6% this fiscal year compared to 7.2% last year.
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