Retailers cross fingers as the festival season approaches

For the first time in decades, Indian retailers have mixed expectations for the upcoming festival season. The festival season in India begins in September with Ganesh Chaturti and stretches till November with Diwali and beyond. Usually, this is the most opportune time for the country's apparel, jewellery and home appliance makers as it contributes to around 40 per cent their annual sales.

Apparel retailers go easy on stocks

Though electronics retailers hope to clock some sales growth during Diwali, apparel retailers are not so optimistic. In fact, they have lowered their sales forecasts for the festive season. Meanwhile apparel brand Benetton India expects Diwali to be dull with sales declining by at least 25 per cent over the past year. According to Sundeep Chugh, Managing Director and CEO, retailers are unlikely to match numbers of previous years and may see 25-30 per cent lower sales than last year.

With customers deferring their purchases of apparel, accessories and beauty categories, retailers are going easy on stocking new inventory for the festive season. However, hopeful of demand reviving by September and October, Puma India has launched new products every month. Similarly, value retailer V-Mart, meanwhile, expects sales to improve by the end of the month on account of better farm income due to sufficient monsoons

Electronic makers upbeat about festive demand

With consumers shopping for laptaps, upgraded television sets and kitchen appliances, electronics retailers are more upbeat about festive season. Retailers like Nilesh Gupta, Managing Director, Vijay Sales expects demand for these products to continue as they are more need-based. His firm registers 40 per cent of its sales from September to November.

Makers of home appliances and consumer electronics expect around 10-20 per cent growth in demand over last year, says Rakesh Khanna, Managing Director and CEO, Orient Electric. To leverage this demand, retailers are filling up inventory for the festive season as disruptions caused by the lockdown and the subsequent shortage of labor has yielded lower production. The production of Bajaj Electricals has reduced to 70-80 per cent of its capacity though it plans to increase this to 100-110 per cent in future, says Anuj Poddar, Executive Director.

However, all retailers worry local weekend lockdowns could meddle with the festive season’s demand and their plans. Hence, they plan to go easy on discounts and instead focus on good EMI options and genuine need, adds Gupta.