Everyone loves a good discount

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to offload their surplus stocks at factory outlets and shopping hubs like Sarojini Nagar in New Delhi and Fashion Street in Mumbai, which acquired sobriquets as export markets, where one could get the latest collection at reduced prices.

But, now shops like Arvind Mills’ recently launched Megamart Outlet promise to be on sale all 365 days. The first Megamart Outlet centre was launched in Chennai in January this year. “Most merchandise in our store comes under some scheme or the other,” promises KE Venkatachalapathy, business head of Megamart. The discounts vary between 10% and 30% and the festive season is marked by higher price cuts.

Traditionally, discount has worked very well with apparel and factory outlets located in suburbs of many Indian cities. “That’s because styles keep on changing and the shopper is also keen to buy stuff that is fashionable and trendy. Moreover, every time he walks in and sees something new in branded apparel, he is bound to make repeat visits. Sale and discounts also help in clearing stock which would otherwise tend to accumulate,” stresses Venkatachalapathy.

While retailers have started offering lower prices on food and grocery, it is still limited because gross margins here are extremely thin. Some corporates are also experimenting with discounts in other categories like home items and appliances. “These are frequently purchased categories and are known value items where market comparisons are possible,” justifies Samar Singh Sheikhawat, vice-president, marketing, Spencer’s Retail Limited.

Some others like Megamart have adopted a double-pronged strategy. While merchandise at Megamart stores would be sold at MRP, bargains and other deals would be offered at Megamart Outlets. Moving forward, Megamart plans to open eight such stores in the next year. Kishore Biyani promoted Brand Factory also plans to open 50 such formats across India in the next two years. Similarly, Aditya Birla group owned More is working with manufacturers and suppliers to promote special offers. In fact, More started a below MRP campaign across its 355 stores in India last month. “We’ve had a good response from consumers and our sales have gone up substantially,” says Sanjay Badhe, senior vice-president.