Indian retailers are keeping price increases measured as they navigate volatility in fabric, yarn and cotton prices, along with supply-chain risks arising from geopolitical disruptions, including the West Asia crisis, according to a research report by Nuvama, a wealth management firm.
In its retail sector outlook, Nuvama said retailers are adjusting sourcing strategies and building safety stocks to manage higher input costs and supply risks without affecting consumer demand. Price hikes are being kept highly calibrated.
Page Industries implemented a 2.2% weighted average price increase in May, while V-Mart expects to limit average selling price increases to 3-5%. V2 Retail is also planning a 4-5 % price increase in the third quarter.
The report said Page Industries and Go Fashion are building buffer safety stocks as retailers closely monitor fabric, yarn and cotton prices. Companies are also assessing the potential impact of geopolitical conflicts, particularly the West Asia crisis, on logistics and supply chains.
Some retailers are taking a more cautious approach to pricing. Vishal Mega Mart, for instance, is protecting its opening and mid-price points to avoid weakening consumer demand. Meanwhile, some premium retailers are absorbing part of the increase in raw material and logistics costs instead of passing the entire burden on to consumers.
Nuvama noted that the impact of higher costs was already visible in the first quarter, with retail margins affected by raw material inflation, product mix changes, end-of-season sales and increased marketing investments. Arvind Fashions, V2 Retail and V-Mart passed on around 4-5% of cost increases to consumers, while Page Industries and ABFRL absorbed part of the higher costs.
Value fashion retailers reported strong double-digit revenue growth during the quarter. V2 Retail recorded 58.4% year-on-year revenue growth, while V-Mart, Vishal Mega Mart and Style Bazaar grew 23%, 18.7% and 28.7%, respectively.
