Retail sales in India recorded a 9% year-on-year growth in February 2026, reflecting a normalisation in consumption following a strong festive-led performance in November and December, according to the latest Retail Business Survey released by the Retailers Association of India (RAI).
The survey indicates that growth has stabilised at a healthy level, with consumption trends remaining resilient despite the tapering of seasonal demand seen during the festive and wedding period.
Performance remained broad-based across regions, with the West and East reporting relatively higher growth at 10% each, followed by North and South India at 9% and 8% respectively. Category-wise, apparel and clothing, along with food and grocery, led growth at 12% and 11% respectively, while discretionary segments such as consumer durables saw relatively softer traction at 7%.
The findings suggest that underlying consumption demand continues to hold steady, supported by sustained urban demand and ongoing contribution from non-metro markets.
At the same time, retailers are beginning to experience rising input cost pressures, particularly linked to global developments in energy markets, which could have downstream implications for margins and pricing.
Commenting on the findings, Kumar Rajagopalan, Chief Executive Officer, RAI, said, “After a strong festive-led performance in November and December, retail growth in February reflects a normalisation to more stable consumption levels. The broad-based performance across regions and continued strength in key categories such as apparel and food & grocery indicate that consumption remains steady.”
At the same time, retailers are beginning to feel the impact of rising input costs, particularly on account of global developments around energy markets. While demand continues to hold, these cost pressures are starting to weigh on margins.
The evolving geopolitical situation in the Gulf region adds an additional layer of uncertainty, and its implications for fuel prices and supply chains could pose challenges for the sector going forward.
Overall, consumption remains stable, but the operating environment is becoming more complex. Growth in the coming months will depend on how effectively retailers navigate cost pressures while continuing to serve an increasingly diverse and evolving consumer base.”
Industry stakeholders note that while global geopolitical developments, including tensions affecting key energy supply routes, may influence inflation and logistics costs, the immediate impact on consumer demand has so far remained limited.
Looking ahead, retail growth is expected to be driven by underlying demand fundamentals, including expansion in non-metro markets, improving supply chain efficiencies, and continued evolution in retail formats.
