BOTTOMLINE: SPECIAL OFFERS NOT MAKING MUCH DIFFERENCE

Drooping sales graphs upset southern retailers

Our Marketing Bureau

Leading retailers in the south say they are passing through one of the dullest festival sales seasons, despite promising a slew of freebies with every major purchase. And the pattern is being repeated across segments, whether gold, durables or sarees.

Leading Chennai-based consumer durables retailer Vivek Ltd expects an up to 25 per cent drop in sales this festival season. The consumer durables market usually gets buoyed up at this time of the year and does about 40-50 per cent more than the usual monthly average sales. According to Vivek Ltd chairman and managing director (CMD) BA Kodandaraman, the retail chain usually does about 75-100 per cent more than its normal monthly sales of around Rs 11 crore during the festival season (October 16 to November 15).

Due to the economic slowdown and prevailing market recession, the market in general, as also Vivek’s, could just repeat last year’s sales performance in the festival season, he said. In the last two months this year — September and part October — no appreciable sales have taken place because customers are waiting for special promotions and more attractive schemes, the CMD said.

Mr Kodandaraman, therefore, expects the previous months’ backlog to be cleared in the festival season with more people shopping. Although dealers do a lot to energise the market, there are no special incentives for them during the season from the manufacturers, except some discounts on bulk sales, he said, adding they could even experience a cut in their incentives.

Unlike earlier, when only a few manufacturers had gift schemes, this year, almost every manufacturer has come out with a slew of promotional schemes, offering huge prize money or big discounts, including conservative players like Sony, who do not spend much on promotions usually and rely mainly on their product quality instead.

In Bangalore, prominent electronic goods dealers like VGP and the Uday group say that sales of all electronic items are very dull. "There is an almost 50 per cent drop in sales as compared to last year," said a senior VGP official. Stiff competition and the general slowdown in the economy are the prime reasons cited by the dealers for the downslide. VGP’s festival offers include a dining table with every washing machine, a watch with every television set, a blanket with every refrigerator and a number of scratch and win schemes. Yet the scene is bad, say the sales officials in the showroom.

(With inputs from M Sarita Varma in Thiruvananthapuram, Padmaja Shastri and Anand Krishnamoorthy in Chennai and Kavitha Alexis and Usha Prasad in Bangalore)