Retail sales up 8% in July driven by need-based purchases: Retailers’ Association

Introduction

Retail sales in two major Asian economies showed positive momentum in July, according to separate industry and government data released this week. India’s retail sector expanded 8% year-on-year, while South Korea’s major retailers posted a 6.4% increase, reflecting distinct drivers and consumer trends in each market.

India: 8% Growth Led by Need-Based Purchases

The Retailers’ Association of India estimated that the Indian retail sector grew 8% in July compared with the same month last year. The association said the growth reflected a recovery in demand momentum, driven largely by need-based purchases. Quick service restaurants and the food & grocery segments were the primary contributors to the overall expansion.

According to the industry body, genuine store-level demand—measured in its SANKET report, prepared in association with Innoviti—recovered to 7.1% growth in July after softening through the summer months.

Kumar Rajagopalan, Executive Director and CEO of the Retailers’ Association of India, said the July data provided two confirmations at once: topline growth held up, and genuine store-level demand came back. He noted that this is significant heading into the festive season, as big-ticket purchases tend to be unlocked during that period.

“The base retailers are working from this year is stronger than it was in April or May,” Rajagopalan said. “Retailers are entering the festive season with optimism, anticipating stronger consumer demand. The job over the next few weeks is preparation, including getting inventory in place, executing staffing requirements, and having offers timed for the customer who buys on routine most of the year, but saves the bigger decisions for the season that’s built for them.”

Regional and Category Variations

Sales growth varied across regions. Retailers in the Northern and Southern regions each recorded 9% sales growth in July, while the West and East grew more moderately at 6% each.

In terms of categories, habit-led segments led the growth trajectory. Quick service restaurants grew 13%, and food and grocery rose 12%. Footwear sales grew 10%, followed by apparel at 8%. Consumer durables and electronics were up 7%, jewellery sales increased 6%, and sports goods sales grew 4%. Furniture and furnishing saw the smallest gain, at 1%.

South Korea: 6.4% Increase on Summer Demand

South Korea’s retail sales rose 6.4% in July from a year earlier, according to data from the Ministry of Trade, Industry and Resources. The increase was driven by higher demand for delivery services and travel-related products during the summer vacation season, as well as stronger demand for popular imported fashion brands.

Offline retailers reported a 3.2% increase in sales, led mainly by department stores and convenience stores, both of which extended their on-year gains to 13 straight months. The ministry said sales improved across all product categories at department stores, from imported fashion brands and vacation goods to air conditioning products, with overall department store sales rising 17.9%.

Convenience store sales rose 1.1% despite a decline in the number of visitors, as spending per customer increased.

Online sales jumped 8.5%, driven by food delivery services as well as purchases of groceries and home appliances. Online platforms accounted for 60.8% of total retail sales in July.

Outlook

As both countries move into the latter half of the year, the July data offers a snapshot of consumer behaviour. In India, the emphasis on need-based and habit-led purchases suggests a resilient consumer base, while South Korea’s summer-driven demand and strong online penetration highlight the ongoing shift toward e-commerce. Retailers in both markets will be watching closely to see if the momentum carries into the upcoming festive and holiday seasons.

Reporting by The Hindu Business Line and Yonhap News Agency.