Arvind Fashions Ltd and Metro Brands Ltd are confident of their growth prospects as retail sales rebound in the aftermath of the third wave of the pandemic.
Retail sales in March 2022 grew by 12 percent compared to the pre-pandemic level of March 2019 and by 28 percent over the same month last year, with the removal of pandemic-related restrictions, the Retailers Association of India (RAI) said in a statement.
Kulin Lalbhai, executive director of Arvind Fashions, and Nissan Joseph, CEO of footwear maker Metro Brands, spoke to CNBC-TV18 on robust retail demand and growth rebounding to pre-Covid levels.
Consumer spending dropped during the initial COVID-19 lockdowns but retail sales have recovered rapidly after the third wave, which was driven by the Omicron variant of the coronavirus, Lalbhai said.
"Unlike what we saw in the first wave, retail recovery was much faster in the later waves. Markets also bounced back quickly and in March we could show the growth level similar to pre-COVID phase. Quite a few marriage events in the quarter helped retail sales. Drivers for growth and normalcy returned," Lalbhai said.
Joseph said Metro Brands had a record-breaking quarter in the three months ended December and the momentum has carried on from there.
"There is a little bit of wardrobe reboot and refresh. Metro and Mochi cater to weddings and festive events. We are optimistic about how things will go on from Quarter 3," Joseph said.
On the impact of rising input costs, he said Metro Brands sourced much of its raw material domestically, giving it an edge in anticipating cost increases.
"Our advantage is Metro sources its raw material domestically. It helps us avoid logistical costs.... We have forecast much earlier that raw materials costs would increase. We acted accordingly to hedge against it though these measures are not forever and we are not immune to it. We want to make price increase to our customers bearable and sustainable," Joseph added.
Asked to comment on the outlook for the financial year 2023 and whether price hikes would impact consumer sentiment, Lalbhai said the apparel category experienced 10 percent price inflation in prices, and another price hike is possible later in the year.
"This season saw close to 10 percent inflation in prices and most brands have passed on those prices. As of now, we are not seeing demand erosion. There could be another slight price hike in the autumn-winter season which is post-August," Lalbhai said.
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