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India Retail Crisis: Sales Up, Profits Down!
16 Feb
Summary
- Nearly a third of Indian retail stores are unprofitable.
- Unsold stock on shelves is the primary cause of losses.
- Some retailers may close unprofitable stores by mid-next year.
A substantial portion of India's retail stores are facing profitability challenges, with reports indicating that nearly a third are operating at a loss. This situation persists even as overall sales figures show growth. The primary driver behind these financial struggles is an overabundance of unsold inventory on store shelves.
Retailers are observing that congested displays due to slow-moving or stagnant stock hinder the effective showcasing of new products. This inventory overload has shrunk the selling window for full-price items over the past five years. Consequently, some retail chains are planning decisive actions, including potential store closures by mid-next year, to divest capital from underperforming assets.
