Calcutta, April 17: The retail sector is expecting a rise in demand this fiscal on the back of an increase in the number of working population, a change in lifestyle and a rise in income levels, according to a sectoral survey report by Dun & Bradstreet. However, high real estate prices could hurt profit margins, the report said.
Meanwhile, the textile sector will witness a spurt in demand, but profit expectations are significantly low compared with last year. Higher income levels will influence growth in this sector as well.
According to the report, majority of the survey respondents in retail is bullish on demand and 94 per cent — 13 per cent more than last year — expect sales volume to increase. None of the respondents see sales declining.
Of those surveyed, 84 per cent expect a rise in net profits, while 2 per cent have predicted a decline.
About 96 per cent of the companies have listed customer service as their key strategic focus followed by cost management and technology upgradation.
Around 63 per cent of the companies surveyed list real estate as a major irritant followed by availability of manpower and rising cost of power.
In textile, while demand may improve substantially, high input costs are what the companies will watch out for. With revival in global markets, technology upgradation will be a key strategic focus in this fiscal to combat competition. Last year, the sectors key focus lay on penetrating the domestic market.
A significant number of respondents in the textile sector are optimistic about demand and around 84 per cent expect sales volume to rise. In terms of new orders, only 68 per cent are expecting an increase in the parameter compared with 89 per cent last year.
Around 25 per cent expect new orders to remain unchanged, while 7 per cent expect it to decrease. Capital spending, hiring and selling prices are also expected to go up. Recovery in the global economy will drive growth in this sector, which is export oriented.