New Delhi: Demand for apparel and lifestyle products during the last quarter of 2023 is likely to be subdued despite the festive season as shoppers continue to stay away, belying retailers’ expectations of double-digit growth.
Given the delayed winter, many retailers have now started discounting early to attract shoppers. Retail sales in October and November 2023 showed a growth of 7% compared to the sales levels during the same period in 2022, according to the survey by the Retailers Association of India (RAI).
“The last two-three months have seen muted growth despite being the festive season and the way things are going, we don’t expect any major uptick in demand for the next two quarters. Peak winter has not set in which has impacted the sales and we hope by June onwards, there will be some positive movements in demand,” said Devarajan Iyer, chief executive of department store chain Lifestyle International.
The fashion retail segment has been struggling with a demand slowdown since January this year due to inflationary headwinds.
The overall growth slowed down to 6% in both March and April, according to the RAI, indicating the slowest sales expansion in more than 14 months and increasing marginally to 9% in August and September.
“In comparison with the last festive season, this festive season has been muted. This has forced us to rethink the store expansion strategy,” said Lalit Agarwal, chairman of hypermarket chain V-Mart.
ET visited stores of brands like Marks N Spencer and Lifestyle, who agreed that festive sales were low this year. Allen Solly said the growth is not much, whereas Shoppers Stop at a prominent mall said that the footfall in the malls was low but was higher in the local markets.
Due to the low festive sales, brands like Pantaloons have high hopes for winter sales. H&M said that the reason behind the delayed winter sales in their brand is also the long Black Friday sales.
“Retailers had anticipated double-digit sales growth during the Puja and Diwali seasons in October and November. However, the sales growth has been muted for many retailers. Most retailers have indicated that the footfalls were not even equal to 2022 though the sales were just about the same as last year,” said Kumar Rajagopalan, CEO, RAI.
Segment-wise, the value fashion segment remained more impacted than the premium one and is yet to attain its pre-pandemic level average sales per square foot.
“With sales of homes and cars going up, taking the largest share of the wallet, people are preferring to spend the balance on experiences. Hence, there is an uptick in demand for travel and F&B and apparel sales are impacted,” said Pankaj Renjhen, chief operating officer at Anarock Retail.
Over the past 6-8 months, most companies have been either slashing price tags or offering steep discounts to clear unsold inventory after price increases across all apparel categories last year.
“Many retailers, especially in the apparel category, only grew over last year because of new store openings and online sales. While like-for-like store business was negative in more than 50% of the retailers surveyed. Retailers did witness a growth in high-value products,” said Rajagopalan.
