Which Categories and Regions Need More Attention as Retail Growth is Uneven?
What does Electroyuva think?
India's retail market is growing, but not every category, city or region is growing at the same pace.
A fashion retailer may be seeing strong demand in smaller cities, while another category may be experiencing slower growth. A store performing well in one region may struggle in another. Even within the same category, consumer spending can change significantly from month to month.
This creates an important challenge for retailers.
A national growth figure may suggest that the market is performing well, but it does not tell businesses where demand is coming from or where they should invest next.
At the same time, other categories and regions followed different growth patterns.
At Electroyuva, we believe retailers need to move beyond headline market growth and understand the differences between categories, geographies and store networks.
The next retail opportunity may not be in expanding everywhere. It may be in identifying the markets and categories where demand is growing faster than the business is currently serving.
What supports our thinking?
Retail spending continued to grow, but the pace changed
The RAI–Innoviti SANKET report for Q2 FY2026–27 tracked retail spending between July and September 2026.
The study analyzed more than 70 million purchases across over 100,000 checkout points, covering 2,800 towns and cities and more than 10,000 PIN codes.
The report measures like-for-like spending at existing stores, helping distinguish underlying demand growth from sales generated simply by opening new stores.
Overall retail spending grew 7.1% in July, accelerated to 9.6% in August and moderated to 6.8% in September.
This indicates that the market continued to expand, although the pace of growth varied during the quarter.
However, the festive calendar provides an important additional perspective.
A supplementary analysis of digitally paid spending during the fortnight before Navratri found that East India recorded 21.7% growth compared with the corresponding pre-Navratri period in 2025. Fashion and lifestyle spending in the region grew 28.3%.
This shows why retailers should be careful when interpreting monthly growth rates. Festival timing, regional shopping patterns and seasonal demand can influence comparisons.
What does the evidence mean?
The findings point to a more complex retail market. Growth is being driven by different categories, regions and consumer markets. A retailer that looks only at national sales performance may miss important opportunities or fail to identify weaker areas.
We believe there are four important business implications.
Retailers need to assess market potential and store-level viability together.
Electroyuva's Perspective – What should businesses do?
We believe retail strategy should be built around a more detailed understanding of category, geography and store performance. Instead of asking whether the retail market is growing, businesses should ask where growth is coming from and whether they are positioned to capture it.
This helps businesses make decisions based on market evidence rather than relying only on historical sales.
What is our final point of view?
India's retail market continues to offer significant growth opportunities, but the opportunity is not evenly distributed.
Fashion and lifestyle, grocery, electronics and jewellery are following different growth patterns. Smaller cities are showing stronger like-for-like spending growth than Tier 1 markets. Regional demand is also influenced by local preferences and seasonal occasions.
For retailers, this means that a national growth strategy may no longer be sufficient. Businesses need to understand which categories are gaining momentum, which markets are becoming more attractive and which store formats can serve those markets profitably.
At Electroyuva, we believe the next stage of retail growth will depend on better market selection, sharper category planning and stronger local consumer understanding.
The opportunity is not simply to grow with the retail market. It is to identify where the market is growing and position the business to capture that growth.
Electroyuva | Consumer Intelligence. Market Understanding. Business Growth.
Sources and References
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Retailers Association of India (RAI) and Innoviti Technologies – SANKET Report Q2 FY2026–27, October 2026. Covers July–September 2026 retail spending, categories, city tiers, regions and payment behavior.
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Retailers Association of India (RAI) – Knowledge Reports Repository, Business Survey Round 74, August 2026 retail performance.
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Retail Intelligence – India Store Openings Monitor, September 2026. Provides a supplementary view of store openings by city, category and format.