This festival season was the worst in 4 years, say retailers


November 16, 2012

Priyanka Pani, The Hindu Businessline
Mumbai, November 16, 2012

Mahesh Patel, owner of a departmental store in suburban Lokhandwala in Mumbai, is disappointed with the festival sales this year. Patel, who also trades in crackers, said there was a 20 per cent decline in sales this time.
Several big box retailers such as Shoppers Stop, Pantaloons and Croma, which form some 6 per cent of the retail market (according to retail advisory firm Technopak), were reported to have witnessed a bumper sale. The rest 94 per cent feel that this festival season was the worst in the last four years.

The only segment that grew was personal gadgets such as mobiles and tablets, said Nilesh Gupta, MD, Vijay Sales, a consumer durable retailer.

He said this year there was 8-10 per cent growth compared with 15-18 per cent last year.

Girdhar Bagari, an apparel retailer in Angul, a tier III town in Orissa, said his three-floor store used to remain open till late in the night during festival time. However, this Durga Puja he had to shut shop by 10 p.m.

“Diwali sales were the only respite this time as people bought several traditional wears and sarees but overall there was a 25 per cent slump in sales compared to last year,” Bagari said.

Mahesh Agarwal, a retail commission agent in Raipur, said that there was less demand for branded/premium apparels this season from Orissa, Chattisgarh, Jharkhand, Bihar and Madhya Pradesh. “The sales for high-end (Rs 1,500 and above) was down by 30-40 per cent,” he added, while saying the demand dropped drastically in West Bengal.

However, a few markets in Andhra Pradesh fared well during the Vijaya Dashami celebrations. Om Prakash, owner of Kanak Durga Silks in Warangal saw sales worth Rs 40 lakh per day. While Delhi and other northern markets had a subdued Durga Puja celebrations, Diwali wasn’t able to add any sparkle to the overall business as the prices of crackers and sweets doubled over last year.

“The decline in sales could be due to the extended sale/discount period this year. High value items were impacted and clothing. The economy is slow and companies are looking conservative,” said Devangshu Dutta of marketing research firm Third Eyesight.

Meanwhile, Arvind Singhal of Technopak Advisory said that the economic slowdown in the last 12-18 months has led to a low volume growth for almost all consumer firms. “Most of the companies grew in single digit from 10-15 per cent last year even as consumers restrained themselves from discretionary spends on back of high inflation of 8-10 per cent. If this continues, we expect this to decline further to 5-6 per cent in the next few months,” he added.