Consumer Staples & Discretionary - Outlook 2021: Equal preference for Staples & Discretionary - ICICI Securities
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CY2021: Potentially a year of consumption recovery (on low base for some).
Staples: We see moderate inflation and return of rural wage growth to be the key drivers. We expect the industry formalisation thesis to sustain - strategic focus on growth even at the cost of (gross) margins. There are risks too - consumers reverting to pre-CY20 behaviour (lower health and hygiene focus, lower in-home consumption of packaged food).
Discretionary: Growth drivers are (1) sharp demand recovery (mostly priced in), (2) store expansion (locking in lower rentals) and (some) cost efficiencies driving operating leverage benefits.