(Reuters) – Indian clothing retailer Trent posted its slowest revenue growth in 14 quarters on Thursday, as consumers in urban pockets grappled with rising cost of living and cut down their spending on non-essential goods.
Tata Group-owned Trent posted a 39% a 39% surge in second-quarter revenue to 41.57 billion rupees ($492.8 million), marking its slowest revenue growth since the quarter ended March 2021.
“Consumer sentiment has remained relatively muted,” Chairman Noel N Tata said, adding that seasonality has also added to headwinds for the business.
Food prices have soared in recent months, cutting into the budget of the middle class and squeezing the profits of urban-centric consumer-focused corporates, including department store chain Shoppers Stop and KitKat maker Nestle India.
Trent’s consolidated net profit in the quarter ended Sept. 30 rose 44% from last year to 3.39 billion rupees, its slowest profit growth in five quarters.
However, executives at consumer majors, including Dove soap maker Hindustan Unilever and McDonald’s franchisee Westlife Foodworld, have indicated they would continue investing in India to cash in on the projected long-term growth.
Trent, too, has been steadily opening more Zudio stores that cater to GenZ and millennial consumers, who regularly refresh their wardrobes with new styles. Thirty-four new Zudio stores were added in the reported quarter.
The company also opened seven new Westside stores, which sell clothes at a higher price compared to the Zudio stores but still at a discount to Western fast-fashion brands such as H&M and Zara.
Shares in Trent fell as much as 9.3% to 6,322 rupees after the results.
Besides Zudio and Westlife stores, the company operates Star supermarket under Trent Hypermarket and British retail major Tesco.
($1 = 84.3575 Indian rupees)
(Reporting by Praveen Paramasivam and Ashna Teresa Britto; Editing by Sumana Nandy)
