With the festive season in India setting in, retail sales grew 17 percent year-on-year and 15 percent compared to pre-pandemic levels in the month of August.

Amid inflation being seen in most items, retailers are indicating a moderate growth trend for the upcoming festive season. But the impact of inflation is being seen in the lower-priced or mass market items that aren't seeing much growth, unlike the premium segment.

The Retailers Association of India (RAI) said while the upper middle and elite class are shopping, customers from lower income groups are not shopping much.

From a category point of view, consumer durables, jewellery and apparel & clothing - categories that people shop for during festivities saw just 18 to 22 percent growth. Beauty and personal care products are also finding favour amid festivities growing 25 percent year on year.

Strong growth was also seen in sales of footwear and sports goods. Retailers are now hoping that the moderate growth trend is temporary and that consumption gets more broad-based as the main festive season kicks in.

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