Organised retail is experiencing a clear bifurcation as value-focused formats significantly outperform premium and traditional categories during the current festive season. According to reports from The Economic Times, value fashion emerges as the clear leader with double-digit like-for-like growth at select stores and high single digits at others. The sector demonstrates strong fundamentals with beauty products featuring in 30-40% of bills at some formats and causing frequent stock-outs, while kidswear contributes about 35% of sales at one chain. Eyewear stands out with top stores growing 20-25% on a like-for-like basis, supported by free lens replacement programs that bring customers back and limited cannibalisation from expansion.
Recent demand patterns show healthy performance in July and improved August on end-of-season sales and early festive buying, followed by softening in September and October as the festive calendar shifted and the Pitrupaksha period kept shoppers away. As reported by The Economic Times, retailers expect traction to pick up from mid-October, with the bulk of festive spending in early November when salaries are credited. The performance gap between formats is stark, with company-owned stores outperforming franchisee-run ones and malls beating high streets. Newer retail corridors typically require one to one-and-a-half years to reach optimal footfalls, highlighting the importance of strategic location and execution. However, some operational challenges persist, with premium apparel brands facing warehouse delays and franchisee-run stores struggling to source merchandise, while footwear shows mixed performance with mall stores doing better than high-street outlets.
According to The Economic Times analysis, value retail sales are projected to compound at about 22% over FY26-29, compared to roughly 13% for traditional retailers and 10% for footwear. Profit growth over the same period is estimated at about 29%, 24% and 16% respectively. The report identifies Lenskart as a top pick with a target price of ₹800, citing its vertically integrated manufacturing, automated production, omnichannel presence and house-of-brands strategy. Lenskart's strong unit economics, with sub-10-month store payback and over 33% store EBITDA margins, support expansion toward approximately 4,500 India stores by FY29. We estimate revenue, EBITDA and PAT CAGRs of 27%, 46% and 59%, respectively, over FY26–29E. Meesho receives a target price of ₹240, supported by its multi-sided e-commerce marketplace model and expected 25% CAGR in marketplace Net Merchandise Value over FY26-31. Meesho has scaled to 274m annual transacting users and over 2.8b last twelve months placed orders while delivering industry-leading unit economics through its asset-light model.
Despite positive trends, several challenges persist in the retail landscape. As reported by The Economic Times, drought and water shortages in nearby villages pose key downside risks to rural incomes and discretionary spending as the festive season approaches. In college-heavy catchments, strong walk-ins do not convert into purchases at the same rate, highlighting the importance of conversion optimization. The report emphasizes that growth increasingly comes from value formats, even inside department stores, where freshness and beauty are pulling in footfalls, with inventory and location now explaining performance as much as demand does. Retailers remain cautious, with regional checks not always extrapolating nationally, requiring careful analysis of local market dynamics and consumer behavior.
