Value-focused apparel retailers such as Vishal Mega Mart, V-Mart, V2 Retail, and Baazar Style Retail experienced significantly stronger revenue growth in FY ’25 than the premium apparel retailers, even though discretionary consumer spending (especially in urban centres) has decreased overall.
The revenue growth from value retailers was between 17% to 62%, with same-store sales growth (SSG) in the range of 12% to 29%. Premium retailers, such as Vedant Fashions and Arvind Fashions, reported very modest single-digit revenue growth, while Aditya Birla Fashion reported an enormous 47.5% decline in FY ’25.
According to analysts, the reason for this disparity is the increasing consumer aspiration in smaller towns, growth in share of private labels by many value retailers, and fast scaling. To cite an example, Vishal Mega Mart disclosed that its private label penetration stood at 73.1% of total revenue for FY ’25 as against 71.8% in the previous financial year. The retailer, which has almost 700 stores, intends to add around 90 new stores in FY ’26, primarily in smaller cities.
Even established chains, such as Trent, which owns the value retailer Zudio, experienced a slowdown. They generated revenue of Rs 4,798.4 crore (US $ 553 million) with 39% growth in FY ’25, but it slowed from FY ’24’s rate of 50%. Premium players such as Shoppers Stop reported a tiny increase in revenues with some improvement, benefitting from store rationalisation.
Experts expect that premium retailers will see an improved level of demand in FY ’26 and the recovery will take some time. Value retailers are continuing to take advantage of a different consumer behaviour that is developing and the ongoing retail formalisation in smaller markets.
