Indian Retail rebound is for real; brace for the summer heat now

If the trend of some of the publicly traded stocks in the consumer & travel businesses is any indication, then the retail revival is for real.

About 24 months ago around the same time, there was much uncertainty on how things would span out. In India and world over. The world had witnessed an unforeseen level of a viral infection, what started off as a flu somewhere in deep interior China. By end Mar. ‘20, most parts of the world was shut down – local offices, road and rail travel, air travel – pretty much everything. Only Trump and a few others kept naysaying the C-virus and went on with their daily lives, only to repent much later.

Back in India, the Retail business was the most impacted, alongside Manufacturing and Services. Over 1 million people are directly employed in the organised retail trade while there are an estimated 14 million small and marginalised shopkeepers – Kirana or Mom & Pop shops as they are known as. Everyone had to shut down their doors without any exception. Only the medical shops were allowed to be open while hospitals overflowed with patients.

Several top retail companies in the country were on the verge of closure permanently. While the fate of the Future group still hangs in the balance in a 3-party spar alongside Amazon & Reliance group, many others have waded through the mess over the past 24 months. If their current stock market prices are any indication, then clearly things have bounced back and how. Here are some key examples;

Jockey – the inner wear brand from America licensed in India by Page Industries has seen its stock prices almost treble to Rs. 45,150 per share. India’s homegrown fashion giant Raymond has bounced almost 3 times to Rs. 801 in Mar. ‘22. Trent has exploded 4x to Rs. 1,318 a share. India’s largest and oldest Departmnt store chain Shoppers Stop – which many said would shut down completely alike its global peers Debenhams and Neiman Marcus has in fact tabled its stock prices to Rs. 453 this month since the same time in 2020. Arvind Fashions, the maker of iconic fashion brands like Arrow (shirts) and Lee (bran ded denims) among others had grown 3x around the festival period in 2021 and has settled around Rs. 300 right now.

On the other hand, Dominos Pizza, run by Jubilant Foods has seen a steady decline in its share price from a peak of Rs. 4,500 during the festival period of 2021 to a low of Rs. 2,907 right now. However, the current price is still 50% more than what it was in Mar. 2020. On the contrary, travel company Mahindra Holidays, which runs a chain of resorts across India as well as shared resorts across the world has benefitted with an upswing in travel business over the past six months. During Sep. 21 ahead of the crucial travel season, the company witnessed an all time high of Rs. 267, a growth of 2.2x, after settling to Rs. 250 currently. This would obviously swell in the coming months, with revenge shopping & travel at its best. Indian Hotels, which runs the country’s pride – The Taj Hotels, has now come back to Sep. ‘21 levels and is hovering around Rs. 234, almost double than its price 24 months back. East India Hotels, run by ITC and has a number of sub-brands including the ITC Grand is trading at Rs. 154, more than twice of what it was in Mar. 20.

The anomaly of share prices of Dominos and hospitality companies is a clear indication that consumers are now stepping out of home for work and leisure and actively, at that. During the past 2 years, discerning diners were comfortable ordering and eating at home all through the day and deep into the night, However, with most cities opening up actively, the delivery portion of their businesses has come down while the dine-in opportunity has grown significantly. The same applies for apparel and accessories brands too, who have seen a huge uptick in their footfalls in high streets and malls. The parking lots are running full at Malls and Multiplexes and with back to back movies across all major languages on the big screen, it is no surprise that the likes of Amazon Prime & Netflix would survive alongside, somehow.

The Indian Retail revival is for real. If the retailers do not brace up to the opportunity and welcome the new Financial Year 2022-23 with full vigour, the fault lies within and not outside, simply put.

The country has seen minor disturbances since Sep. ‘21 – the supposedly 3rd wave which waned off before a huge spread, the Omicron threat in Jan. ‘22 which again was a damp squib and finally the Russia-Ukraine unrest. With almost 95% of adults having taken atleast 1 dose of the vaccine, the spread has been contained like in no other country. The recent international trouble will certainly have an impact on fuel prices – which would spiral across logistics and transportation of essential and non-essential goods, due to which inflation would increase. However, this would probably be met with a decent hike in salaries this year, after 2 years, for many working Indians. Agricultural output has been much better in the past 2 years, gaining further confidence to farmers and the larger ecosystem.

So, bright days are ahead. Now, it is up to each person in the Retail ecosystem – Business owners, Corporates, employees, wanna-be Entrepreneurs, Lenders, Bankers and ecosystem partners, to take advantage of the same. Do not blame the Government or International issues – Geo-political or bilateral. That’s going to help very little.