Tepid weekend sales to spoil retail’s Diwali
Footfalls at prominent malls take a knock, very few walk-ins get converted to purchases.
“I am hearing a lot of retailers are not happy,” the CEO of a fashion store chain said, asking not to be identified. “It was not as good as anticipated. My feeling is that retailers would be marginally disappointed.”
Footfalls at prominent malls in New Delhi, Mumbai and Bengaluru on the weekend before Diwali were lower than in the comparative period in recent years and even if there were walk-ins, purchases were lower, retailers said.
“It was very bad on Saturday as traffic in stores had dropped by almost 25% compared to last Saturday,” said the CEO of a global fashion retailer.
A senior store executive at a Zara store in the New Delhi region said only 50% of the consumers entered the store while the remainder window-shopped, and the conversion rate was even lower.
Retailers said consumers are spen-ding only on need-based shopping this year and are mostly holding back on discretionary spending amid a slowdown in the economy.
The International Monetary Fund last week cut its forecast for India’s gross domestic product growth to 6.1% from a 7% expansion estimated in July.
The mood in the malls of Bengaluru was solemn as shoppers opted for the age-old mindset of saving and spending for Diwali instead of EMI-driven splurging.
“The economic slowdown has had an impact on my budget, but I planned and prioritised my Diwali shopping,” said Ruchi Kumar, an HR professional who was looking for ethnic wear at Shoppers Stop in Bengaluru’s centrally located Garuda Mall. “I saved about Rs 2,000-3,000 every month for Diwali shopping and avoided the temptation of sales through the year. It is about going back to basics, just like our parents who saved money instead of splurging.”
Richi Verma, a homemaker, was browsing for Diwali home decor at Westside store in Forum Mall. She said her budget for Diwali shopping remained the same as last year – in the range of .`15,000-20,000 – but this year she was “not indulging in unnecessary expenses.” J Suresh, CEO of Arvind Fashions, the seller of Gap, US Polo, Calvin Klein and Tommy Hilfiger branded products, said high-sales days this Diwali are fewer than the festive season last year.
“Typically, sales growth begins two weeks before Diwali. This year, we have noted absolute sales picking up only this weekend and expect it to grow positively closer to the date of the festival, unlike the previous years,” he said. “General consumption is low and people are holding money closer to their chests. Also, our online sales have taken a good share from offline.”
Even the weather gods played spoilsport as retailers complained of rain in Mumbai and Bengaluru.
Pawan Khandelwal, CEO of Iconic department chain, said he doesn’t expect more than a 4-5% increase in same-store-sales this year from last Diwali. He said during Diwali, retailers would typically enjoy comfortable double-digit growth.
“After Dussehra, weekdays were weak and weekends were doing better, and last weekend was good,” he said.
For electronics retail chain Vijay Sales, sales were “reasonably good” this weekend, although the buoyant pickup before Diwali was missing, director Nilesh Gupta said.
“We still grew by more than 7%, which is much better unlike several other industries, but the overall pessimism in the market seems to have impacted buoyancy and consumer sentiment,” Gupta said.
After sales dropped last Monday and Tuesday, fashion and lifestyle retailers had kept their fingers crossed for an improvement this weekend.