The December quarter has been a mixed bag for the retail industry. While the festival and wedding season fuelled the demand for sectors such as jewellery, footwear, a divergence in growth trends was visible in the apparel segment, as per a report by Nuvama Institutional Equities.

“The sectoral outlook for Q3FY25 is mixed, with jewellery and value retail segments leading the growth while footwear and QSR segments are showing early signs of a recovery. However, a broader consumption slowdown persists amid weak consumer sentiments and a moderate festive season performance,” the report added.

The jewellery sector is expected to post robust growth numbers in Q3FY25 on the back of strong demand driven by festival and a longer than usual wedding season. “Average gold prices are up about 30 per cent y-o-y (in rupee terms). Companies have carried out their guided store additions and are mostly ahead of the same,” the report noted.

Footwear companies witnessed a pick-up in growth during December quarter on the back of festival and wedding season demand. “Companies have front-loaded the inventory to avoid any supply chain problems due to implementation of BIS norms. Thus, the impact of BIS norms, which were implemented on August’ 24, is not yet visible. Gross margins are likely to stay stable given steady raw material costs,” the report added. However, it noted that same store sales growth is still low in products segment priced upto ₹1000.

Noting that the apparel segment witnessed divergence in performance, the report by Nuvama Institutional Equities added that there has been a slowdown in premium fashion segment but value fashion maintained strong demand trends. While the apparel segment did witness an uptick in demand during festival season, a subdued consumer demand trend was witnessed by several players post festival season.

The quick service restaurant sector led by players such as Jubilant Foodworks is beginning to catch up in terms of demand trends, the report added. “The delivery channel is likely to be the key growth driver for most brands,” the report added.