Tata-Owned Retailer Feels the Pinch as Pandemic-Era Growth Momentum Wanes
Tata Group’s retail arm, Trent Ltd, has become the latest casualty of the post-pandemic recalibration in India’s fashion and lifestyle retail landscape. The company, which operates the popular Westside and Zudio chains, reported its slowest revenue growth since FY21 in the January–March quarter, raising concerns about the longevity of the fast fashion boom that followed the reopening of the economy. Revenue for Q4FY24 rose 28 percent year-on-year to ₹4,334 crore, significantly lower than Trent’s five-year compound annual growth rate (CAGR) of 36 percent and a stark contrast to the 405 percent YoY growth seen in Q1FY23.
The sluggish quarter spooked investors, sending Trent’s stock down by a sharp 19 percent on April 7. Analysts attribute the moderation in growth to a combination of high-base effect, weakening urban demand, inflationary pressures, and a visible shift in consumer sentiment. The company’s deceleration mirrors trends seen across the Indian fast fashion ecosystem, as several marquee names — including Uniqlo, H&M, and Lifestyle — struggle to sustain the blistering growth rates recorded in the immediate aftermath of the pandemic.
Trent’s Q4FY24 revenue growth slows to 28% YoY, lowest since FY21
Stock plunges 19% following results miss and cooling market signals
High-base effect, urban demand stagnation cited as key headwinds
Fast Fashion Loses Steam Amid Inflation and Middle-Class Consumption Constraints
In FY23, international brands Uniqlo and H&M reported staggering sales growth in India of 60 percent and 40 percent, respectively. However, that momentum has noticeably waned in FY24, with Uniqlo’s growth moderating to 31 percent and H&M’s collapsing to just 11 percent, according to Ministry of Corporate Affairs filings accessed by Tofler. This deceleration has coincided with a squeeze on discretionary spending, particularly among India’s urban middle class, which has been grappling with subdued wage growth and rising household expenses.
Retail analysts point out that the broader discretionary consumption pattern in India has shifted post-Covid. The surge in retail spending between 2021 and 2023 was largely fueled by pent-up demand, stimulus-fueled liquidity, and temporary savings. That phase is now making way for a more calibrated, sentiment-driven consumption cycle. High-income consumers continue to spend freely on travel, hospitality, and luxury goods, but the middle-income segment—once a core pillar of fast fashion—has turned more cautious.
Uniqlo’s India growth drops from 60% in FY23 to 31% in FY24
H&M’s YoY growth falls steeply from 40% to just 11% in FY24
Rising inflation, modest wage increases hurting discretionary spending
Zudio and Westside Hit a Consumption Plateau in Urban India
Despite its aggressive store expansion strategy and consistent market outperformance, Trent is now facing demand fatigue in metros and Tier-I cities. Chains like Zudio and Westside, which built their success on affordable fashion for urban millennials, are increasingly struggling to maintain their growth trajectory. The high base of earlier quarters is now becoming a statistical burden, and even like-for-like sales growth has begun to flatten.
Industry observers believe that brands positioned in the value-fashion category are particularly vulnerable to shifts in consumer sentiment. According to Abhijeet Kundu of Antique Stockbroking, “The growth Trent had achieved was driven by strong double-digit same-store sales growth. Now, that high base is working against them.”
At the same time, price-sensitive consumers are increasingly reevaluating their purchases, often prioritizing value over brand loyalty. This shift has translated into lower ticket sizes and reduced frequency of purchases at mall-based retailers and brand-owned outlets.
Zudio and Westside face headwinds from high base and demand fatigue
Urban middle-class customers cutting back on fashion spending
Value-fashion players struggling to sustain double-digit store sales growth
Tier II and III Cities Emerge as New Growth Engines for Apparel Retail
While metros see softening demand, the smaller towns of India are rapidly becoming the focal point of retail expansion strategies. Rising disposable incomes, aspirational young consumers, and a growing digital footprint have made Tier II and III cities more attractive for apparel brands seeking new markets. Companies like Reliance Retail (Yousta), V-Mart, and Trent’s own Zudio are deploying aggressive store rollout plans in these regions to capitalize on consumption momentum outside the traditional urban strongholds.
A Deloitte–Retailers Association of India (RAI) report from February 2024 noted that Gen Z shoppers in non-metro cities are driving fashion consumption with a clear preference for organised retail formats. These consumers exhibit high brand awareness, significant online activity, and a strong inclination toward style, value, and ethical branding. Brands that can cater to this evolving profile stand to gain a significant edge in the next phase of market growth.
Tier II and III cities show rising demand for branded and organised retail
Gen Z in non-metros becoming key driver of fashion purchases
Retailers expanding aggressively into smaller towns and cities
Gen Z Reshapes the Rules of Fashion Retail with Values and Digital Influence
A defining feature of the evolving consumer landscape is the emergence of Gen Z as the most influential demographic in fashion retail. This cohort, born between the late 1990s and early 2010s, is now shaping nearly half of all lifestyle purchase decisions in India. With their reliance on digital research, preference for ethical and sustainable products, and low tolerance for brand inauthenticity, Gen Z is forcing legacy retailers to rewire their product, marketing, and sourcing strategies.
According to the Deloitte-RAI study, nearly 63 percent of Gen Z consumers in India now prefer making purchases online, with a majority engaging in thorough pre-purchase research across platforms. For brands like Trent, this demographic represents both an opportunity and a challenge. While Gen Z’s enthusiasm for fashion is undeniable, their loyalty hinges not on legacy but on resonance—meaning brands must reflect shared values, sustainability, and cultural awareness to remain relevant.
Gen Z influences 45–48% of fashion and lifestyle purchase decisions
63% of Gen Z consumers in India prefer online purchases over in-store buying
Authenticity, sustainability, and digital fluency essential for brand engagement
Retail Growth Faces Structural Pressures Despite Sector’s Long-Term Potential
Although the organised retail sector continues to outperform traditional retail by nearly 10 percent annually, analysts caution that growth in the near term will likely be uneven and contingent on broader macroeconomic dynamics. Regulatory changes such as revised income tax structures, slowing wage growth, and subdued consumer sentiment are likely to dampen spending across categories, particularly in discretionary segments like fashion and accessories.
Further, industry experts have warned about emerging risks such as delayed store expansion plans, intense competition in value retailing, and the difficulty in predicting fast fashion trends among younger shoppers. Elara Capital, in its sectoral outlook, highlighted that while the retail opportunity remains structurally intact, brands must adopt adaptive models that can withstand changing consumer dynamics and rapidly shifting trends.
Organised retail continues to grow but faces short-term headwinds
Regulatory and macroeconomic pressures influencing retail consumption
Retailers must focus on agility, digital strategy, and value positioning to sustain growth
