Top executives at retail firms such as Reliance Retail, Trent, Shoppers Stop and Vishal Mega Mart have pointed to a better FY26 than FY25, led by the government’s fiscal stimulus measures, a good monsoon forecast and growing discretionary incomes. These companies have followed their consumer goods peers such as Hindustan Unilever (HUL), Coca-Cola, PepsiCo and Nestle India, who’ve said that the virtuous cycle of growth will begin to kick in now as there are no new headwinds to demand in FY26.
While grocery retail performed better than fashion retail in Q4 for companies such as Reliance Retail and Vishal Mega Mart, discretionary categories were expected to gain steam in Q2 of FY26, Kavindra Mishra, MD & CEO, Shoppers Stop said.
In an earnings’ call on Wednesday, following weak Q4 numbers, Mishra said the demand environment had been challenging in January and February of 2025, notably in value fashion, forcing the company to advance end of season sales and push aggressive offers in beauty to shore up sales growth in the value and masstige segments. Shoppers Stop also closed 23 non-profitable stores in FY25, taking its net additions to 50 stores for the year. Mishra said that the company was at the end of its store rationalisation efforts, with total store count at 299 by the end of March 2025.
“FY26 is likely to see discretionary spending improve on the back of the fiscal stimulus measures, urbanisation and a growing middle class. Focus on customer centricity, premiumisation, AI and automation should aid growth. The IMD’s forecast of good monsoons this year will augur well for the retail market,” Mishra said about the outlook for FY26.
Trent’s chairman Noel Tata said that the company was building on its agenda of growing reach and becoming more accessible to consumers in FY26.
“The Indian consumer has evolved rapidly in the recent years and is seeking an aspirational product proposition, attractive pricing and importantly ready accessibility. We believe building density of our presence in key markets allows us proximity and the ability to service our customers readily. The market opportunity associated with building brands and a pure play direct-to-customer business like ours remains immense going forward,” Tata said.
Both Trent and Reliance Retail, which reported double-digit topline growth at 28% and 16.3%, respectively, in Q4FY25, led by stable Ebitda margins at 15.5% and 8.3%, respectively, remain upbeat about growth momentum in the coming quarters.
Dinesh Taluja, CFO, Reliance Retail said the company reduced inventory and design-to-shelf cycles in fashion retail to increase sales growth in the second half of FY25. This is even as the retail market remained weak overall.
“We have had positive like-for-like growth and double-digit growth in the fashion business this year (FY25), even as the overall retail market has been weak. We believe it has turned the leaf and we will see this continuous growth quarter and quarter going forward (in FY26),” Taluja said.
Sector experts say that most retail majors from Reliance Retail to Vishal Mega Mart had aggressive sale offers in grocery, electronics and apparels to ensure products were affordable to consumers. Analysts say that the northern region, led by the Maha Kumbh Mela, were chief contributors of growth for these companies. Vishal Mega Mart reported an 88% rise in net profit and a 23% increase in net sales in Q4FY25 versus the same period last year.
Gunender Kapur, managing director and chief executive officer, Vishal Mega Mart, said the company remained committed to making aspirations affordable. “As we move forward, our approach remains centred on expanding responsibly, deepening market penetration, and strengthening our private label portfolio,” Kapur said.