Executives from leading retail brands, including Reliance Retail, Trent, Shoppers Stop, and Vishal Mega Mart, are optimistic about a promising FY26, anticipating improvements compared to FY25. This positive outlook is fueled by government fiscal stimulus, favorable monsoon predictions, and increasing discretionary spending. Following the lead of consumer goods giants like Hindustan Unilever, Coca-Cola, and Nestlé India, these retailers believe that the growth momentum is about to accelerate, with no significant obstacles to demand in sight.

Retail Trends and Consumer Behavior

In the last quarter, grocery retail outperformed fashion retail for companies like Reliance Retail and Vishal Mega Mart. However, Kavindra Mishra, MD & CEO of Shoppers Stop, is optimistic that discretionary spending will ramp up in Q2 of FY26. During a recent earnings call, he noted the challenging demand environment in early 2025, particularly in value fashion. This prompted the company to expedite end-of-season sales and introduce aggressive promotions in beauty products to stimulate growth in the value and masstige segments. Notably, Shoppers Stop also streamlined its operations by closing 23 underperforming stores, ending FY25 with a total of 299 locations.

Positive Economic Outlook for FY26

Mishra expressed confidence that FY26 will show a rebound in discretionary spending, driven by fiscal measures, urbanization, and an expanding middle class. He emphasized that focusing on customer-centric strategies, premiumization, and integrating AI and automation would bolster growth. With favorable forecasts for rainfall from the Indian Meteorological Department (IMD), the retail market is expected to thrive.

Noel Tata, chairman of Trent, echoed these sentiments, highlighting the company’s commitment to increasing accessibility for consumers. He pointed out the evolving nature of the Indian consumer, who now seeks aspirational products with attractive pricing and easy access. Building a strong presence in key markets is crucial for servicing customers effectively, and the potential for brand development and direct-to-consumer business models is vast.

Strong Financial Performance

Both Trent and Reliance Retail reported impressive financial results for Q4FY25, achieving 28% and 16.3% growth in topline revenues, respectively, alongside stable EBITDA margins of 15.5% and 8.3%. Dinesh Taluja, CFO of Reliance Retail, shared that the company had been reducing inventory and streamlining design-to-shelf processes in fashion retail to boost sales. Despite a challenging retail environment, he noted that the company experienced positive like-for-like growth and double-digit increases in the fashion sector, suggesting a positive turnaround for FY26.

Competitive Strategies and Market Insights

Experts in the retail sector pointed out that major players, from Reliance Retail to Vishal Mega Mart, have implemented aggressive sales tactics in groceries, electronics, and apparel to keep products within consumers’ budgets. Analysts noted that the northern region, particularly during the Maha Kumbh Mela, significantly contributed to growth. In Q4FY25, Vishal Mega Mart reported an impressive 88% spike in net profit and a 23% increase in net sales compared to the previous year.

Gunender Kapur, MD and CEO of Vishal Mega Mart, reaffirmed the company’s commitment to making aspirational products affordable. He stated that their strategy moving forward will focus on responsible expansion, increasing market penetration, and enhancing their private label offerings.

In conclusion, as FY26 approaches, the retail landscape is set for an exciting transformation. With strategies aimed at enhancing customer experience and tapping into emerging market trends, these companies are well-positioned to navigate the evolving economic landscape.