V-Mart Retail is preparing to raise prices by 3% to 5% in the October-December quarter of 2026 (Q3FY27) as it works to offset rising raw material costs, according to Chief Operating Officer and Chief Financial Officer Anand Agarwal. The executive said early footfall trends are strong as the festive season begins, and that performance is expected to remain steady despite some margin pressure.

The Gurugram-based value fashion retailer held its pricing steady throughout the September quarter even as other retailers raised apparel prices by 10% to 15%, a decision aimed at protecting its value-conscious customer base. With cost pressures building, the planned single-digit hike is now considered necessary, though Agarwal indicated further adjustments could follow. Even after the increase, V-Mart's prices would remain well below the steeper rises taken across the sector, preserving the price gap that underpins its positioning with cost-sensitive shoppers.

"Quarter four onwards, I am sensing because there is a continuing challenge on the oil prices, so there might still be some more challenge left as far as the pricing is concerned," Agarwal noted. His reference to oil points to a structural feature of apparel retail: inputs such as synthetic fibres are crude derivatives, meaning the raw-material pressure behind the Q3FY27 hike is tied to a commodity the retailer does not control.

The pricing move follows a strong September quarter for the retailer, which reported 18% total revenue growth and a 3% rise in same-store sales for the July-September quarter of 2026 (Q2FY27). Since prices were held flat through that period, the growth was volume- and expansion-led rather than price-driven, with the gap between total and same-store growth pointing to newer stores. The planned hike therefore marks a shift: after absorbing costs to defend footfall, the retailer is now passing on a measured portion of them.

On the demand front, early third-quarter footfalls are showing robust traction as Durga Puja festivities begin in eastern India. The shift of the Puja season from the second quarter to the third slightly subdued the previous quarter's performance and may pose a minor challenge to margins. Despite this, overall performance is expected to remain steady and in line with the previous year. For a brick-and-mortar value retailer, festive-season footfall serves as an early indicator of quarterly sales momentum.

Ground-level sentiment remains largely optimistic, overcoming concerns over slightly low monsoons and isolated challenges from Hurricane Arnab in the last week of September. The company will release its full profitability results in early November, when the margin impact of the festive calendar shift will become clearer.

Shares of V-Mart Retail have declined nearly 4% over the past year, while the company's market capitalisation stands around ₹6,296.40 crore.

Source: CNBC-TV18