Retailers are seeing strong signs of a pick-up in demand as sales in the ongoing discount season are turning out to be better than the last time. The end-of-season sale, which began last week, is set to continue till the first week of August.
?This time the discount season has been very encouraging. The sales are definitely incremental to the discount season sales we had in January and August last year. With apparel stores on discount now, sales of both menswear and womenswear have picked up,? Future Group?s joint managing director Rakesh Biyani said. He added that it is too early now to ascertain the quantum of the increase in sales.
Future Group?s Central chain of department stores, present in 12 locations in India, is offering a 50% discount.
?The start has been good. Till now we have seen a 50% increase in sales as compared to last year?s discount. We hope that the momentum will continue till the end of the period,? said Lifestyle International managing director Kabir Lumba. The company has about 80 stores across the country.
Last year, despite offering discounts for an extended period, sales growth was slow, leading to crimped margins. It was only in December that companies saw a higher sales growth of 12-15% on an average. Companies had extended their discounts to more than six weeks, from the usual four weeks, luring customers to loosen their purse strings.
Arvind Brands managing director J Suresh said, ?We are already seeing a 25% increase in sales over the last time. People had been postponing their bulk purchases to this period. Foreign brands especially, are doing well.? The company?s brands include Wrangler and Flying Machine, and it owns franshisee rights for international brands like Debenhams, US Polo and Nautica.
The increased buying comes at a time when high inflation and slowing economic growth are holding back consumers? discretionary spending. Fitch Group?s India Ratings & Research on Friday said retailers are likely to resort to extended discount-driven sales to boost volume growth this year. However, over the past nine quarters, discounts have not benefited volume growth meaningfully, the ratings agency said.
The conversion rate has been higher this year, mall owners point out. Although footfalls have risen by 15-20% at malls, the sales are higher as consumers had put off their purchases anticipating discounts. ?I had postponed buying some western wear earlier this year. So just as the discounts began, I hit the malls. The range of brands on discount seems to be larger this time,? says 25-year-old Sakshi Jain, a financial analyst in New Delhi.