Unlike previous festive seasons, this year Diwali witnessed subdued sales and lower business for apparel retailers across India. Rising prices of commodities, low footfalls, fewer sales and unhappy shopkeepers affected the overall festive mood. Customers kept to purchasing only as much as required instead of splurging the way they do in other years.
Retailers saw minimal growth this year and they were looking forward to Diwali to bring in luck to their sales. So far, apparel retailers have registered just a 10 per cent growth compared to the 30 per cent witnessed last year. The beginning of this year started off on a negative note with high cotton prices, and a 10 per cent excise duty on branded apparel that forced garment units to increase prices by 10-12 per cent further affecting the low consumer sentiment. Except for the discount sale season in July-August, retailers are barely trying to meet the revenue targets.
To attract footfalls during Diwali, retailers like Big Bazaar and Shopper Stop kicked off their festive promotions almost five weeks prior to the festival. While Big Bazaar expected the early campaigning to bring in 25 per cent higher sales, Shoppers Stop’s ‘choose your own gift’ programme for its
two million plus loyalty customers extended the validity of
this initiative to 90 days this time.
But given the general trend in the market, the overall festive atmosphere certainly did not prove to be profitable with inflation still affecting the consumers at large. Higher prices only brought increased sales figures but volume-wise, it was a flat or even lower than last year. Many people did their purchases during the annual sale season that takes place before festival to take advantage of lower prices, followed by a crash with very little buying. Except for the South and the West, rest of the zones, especially the North showed little interest in festive buying. People in the North also begin their winter wear purchases around Diwali, but with a delay in winters and wedding season getting pushed to December end, apparel retailers are further affected by the low or no sale scenario. Retailers will have to just take a wait and watch approach till wedding and winter season showcases some momentum in their sales registers.