Clothing and lifestyle retailers as well as malls said they are seeing a record growth in sales in the past few weeks despite the inauspicious shraadh period, and expect demand at a decadalhigh during the festive season starting with Navratri next week.
“The demand that we are currently seeing is the highest ever since we entered the country and a host of factors, including positive consumer sentiment and fresh merchandise, is driving sales,” said Devarajan Iyer, chief executive of Lifestyle International. “We expect festive season sales to be a bumper one this year with strong double-digit growth despite no discounting. ”
The apparel and discretionary segments were hit badly during the pandemic and were the slowest to recover in the consumer space. However, retailers across apparel, lifestyle products and restaurants posted double-digit revenue growth year-on-year for the March quarter despite a slow start due to the Omicron wave.
The massive wardrobe refresh after the reopening of office and social gatherings helped. Mall operators also attributed the surge to this being the first normal festive period after two years of Covid stress. Retail businesses across India reported a growth of 15% in sales in August compared with pre-pandemic levels (August 2019), according to a survey by the Retailers Association of India (RAI).
Dussehra and Diwali have historically been an occasion for selling full-priced merchandise and most brands refrain from offering discounts on newer collections and products.
“There has been a strong run-up right from Onam to Durga Puja. In fact, we had to reduce discounting this time as the demand for full-priced merchandise remained robust,” said Satyen Momaya, chief executive officer at Celio, a French apparel brand. “Urban consumers are clearly buying discretionaryproducts without any stress on inflation while we see slight slowdown in value or mass-priced products in nonmetros and rural.”
According to consultancy firm Grant Thornton Bharat, the appliance industry has already seen 35% growth this festive season, and other categories including apparel, beauty, wellness and jewellery are seeing significant traction.
“As the festive season approaches, ecommerce channels are expecting a sales growth of 15-20% YoY,” said Naveen Malpani, partner and consumer sector leader at Grant Thornton Bharat. “Additionally, the retail businesses in India has reported around 15% growth in sales compared to pre-pandemic levels, signalling that the festive season sales are expected to level with or even surpass the pre pandemic levels, especially within the premium segment.”
SUPPLY CHAIN COS’ BIZ UP
As a result, lenders of supply chain firms including distributors, dealers and warehousing companies are witnessing an uptick in demand for the upcoming festive season. “The disbursal for supply chain during pre-festive season has already shown an uptick,” said Harshad Malhotra, director of LivFin, a Delhi-based NBFC.
“During the festive season, we are expecting to disburse Rs 170 crore per month as compared to Rs 90-100 crore a year ago. Agri and food processing and consumer electronics are showing the maximum demand.”
Walmart-owned Flipkart will kickstart its flagship Big Billion Days on September 23 while Amazon will likely follow suit with the Great Indian Festival Sale from September 24.
“Ecommerce companies have already acquired warehousing space in anticipation of good sales over the next 10 -15 days,” said Anshuman Singh, chairman and managing director of Stellar Value Chain Solutions. “Omnichannel companies too have taken higher warehousing space in anticipation of good sales that will start from Navratri and continue till Diwali.”
Electronics have also witnessed increase in demand. Elista’s products like smart TVs, washing machines and audio gadgets have witnessed a strong increase in sales in recent months.
“Overall, sales are up by a whopping 30% during this fiscal year. We are confident that we will be able to push the growth rate curve to 45-50% during the festive period. We are running offers on several products, with discounts ranging from 5% to 30%,” said Pawan Kumar, CEO, Elista.
Mall operators expect the momentum to continue till year end.
“We are building the momentum through regular events and people also want to come to the shopping destinations not just to shop but to enjoy the whole experience. Sales and footfalls have been good leading to the festive season and the momentum is expected to continue till year end,” Nandini Taneja, Vice President, Reach Group that has portfolio of over 2 million sq ft across retail and commercial projects namely Airia Mall, 3 Roads, Comercia, and My Tower in Gurugram.