Due to inflation, demand for apparel-footwear is decreasing in small towns, retailers are getting worried

High Inflation Impact: Even though the figures of retail inflation have come down to the lowest level of 18 months. But the fall in the inflation rate has not affected the pockets of the people. It can be estimated from this that due to inflation, there is a decrease in demand in small cities. The demand for lifestyle products, apparel, shoes is being seen less in small towns. After the decline in sales, many retail companies have put their plans of opening stores in small towns in cold storage.

In the hope of increasing demand after the Corona epidemic, retail companies started turning to smaller cities. When the supply was increased, many stores were opened, but according to expectations, demand has not been seen in small towns. Recently, Jagdish Bajaj, CFO of Aditya Birla Fashions, in a meeting with investors, told about the Pantaloons business that demand is strong in metro cities but due to inflationary pressure and weak sentiment in Tier-2 and Tier-3 cities. Has had an impact. Where Pantaloons had planned to open 60 to 70 stores in small towns, it has been reduced to 40 to 50. However, the company is hopeful that the situation may improve in the festive season.

Last year, most apparel and lifestyle retailers had increased product prices following increase in cotton prices and increase in transport cost and rupee depreciation against the dollar. In the last few months, the cost has come down, so the companies have given its benefits to some extent to the consumers. Despite this, demand has remained low in the January-March quarter. However, companies are hopeful that the effect of reduction in inflation can be seen soon on demand.

In fact, due to rising inflation, people have tied their hands on such expenses for the time being. The retail companies have had to bear the brunt of this. But from the RBI Governor to the Chief Economic Advisor, it is believed that inflation is expected to decrease in the coming days. If there is a reduction in inflation, it will help in increasing the demand in small towns.

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