MUMBAI/NEW DELHI: Clothing and lifestyle retailers and shopping malls have seen a sharp recovery in sales across pricepoints in the past few weeks during Raksha Bandhan and Onam, raising hopes of strong demand this festive season even though mass segments in electronics and auto stay under pressure.
Retailers said the recent sales trend indicates a normal festive period ahead for apparel and discretionary segments that had been struggling for almost a year now.
“The last few months have been challenging, but we are now seeing single-digit same-store sales,” said Devarajan Iyer, chief executive of department store chain Lifestyle International. “We have also managed our inventory for the festive season after gauging this demand boost.”
The festive season starts with Onam and covers Ganesh Chaturthi, Durga Puja, Dussehra, Diwali and Bhai Dooj.
“Onam sales have been strong and our recently opened mall, Forum Kochi, at Maradu has reported best-ever sales and footfall than any mall we have opened so far,” said Muhammad Ali, CEO of Forum Malls, promoted by Prestige Group Bengaluru-based developer Prestige Group. “In Benguluru also, sales momentum has started, and we expect to overcome the last few month’s slowdown during the long festive season,” he said.
Consumers started reducing non-essential spending such as that on apparel, lifestyle products, electronics and dining out since Diwali last year due to inflation, increase in interest rates, job losses in sectors like startups and IT, and an overall slowdown in the economy.
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.
Retail sales across categories grew 9% year on year in July, while apparel sales rose 8%, industry association Retailers Association of India (RAI) said.
Brands have been anticipating a recovery in the second half of the fiscal year, as festive season spending kicks in.
“We are seeing positive uptake so far and August has been better than July despite the end-of-season sale in that month (July),” said Satyen Momaya, chief executive of French apparel brand Celio. “We expect to clock 17-18% like-to-like growth in the second half, which is nearly double than what we saw in the first half of the year.”
According to Axis My India consumer sentiment index released on Tuesday, about 22% consumers plan to increase their expenses on clothing. Overall household spending has increased for 58% of the families, a 2% rise from last two months and the highest increase in the last five months, the report said.
