Sales growth in the country's retail sector has fallen over two third in December 2008 as compared to the same month in 2007.
"This was a result of poor footfalls and lower conversion rate at retail stores," according to a study from consulting firm KPMG. In December, the retail sector registered a growth of mere 11 per cent as compared to 35 per cent in December 2007.
To preserve cash, shoppers curbed spending and deferred purchase of big ticket items, said the report titled 'Indian Retail: Time to Change Lanes'.
According to industry estimates, October-December sales constitute nearly 40 per cent of the total sales in segments such as apparels and consumer durables.
The slow sales in retail sector is expected to continue for the next 12-18 months, depending on the government incentives to boost the economy, said the report.
"We believe that players, which take immediate strategic measures will be dark horses... Retailers need to think quick to protect their margins and become tougher for more challenging times," said Neil Austin, KPMG's global head of market.
But the consulting firm believes that the long-term outlook is still attractive. "The demographic and economic environment will add momentum to the slowing growth rate," the report said.
