“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.
‘Inflation not a Concern for Urban Consumers’
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).
“About 10% of our portfolio is under fit-out and will get operational with the start of festive season,” said Pushpa Bector, executive director at DLF Retail, which operates premium malls across Delhi-NCR. “Usually, this number is 3-4% and this year brands have extra energy as after two years, they are getting the opportunity to attract customers. We are hoping to do the best ever sale and footfalls are also expected to reach record high.”
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 discretionary products without any stress on inflation while we see slight slowdown in value or mass-priced products in non-metros 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.
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