The 4K TVs, fully-automatic washing machines, double-door refrigerators and split air conditioners are neatly lined up at the Croma, Vijay Sales, Kohinoor and Reliance Digital stores at SV Road in Santacruz, Mumbai. But there are barely any shoppers.
The picture is no different in Pacific Mall, Dwarka and Unity One Mall, Janakpuri, both popular destinations for shoppers in Delhi. The malls wear a deserted look, just weeks ahead of Navratri and Dussehra, important occasions in the festive and shopping calendar.
Durable retailers point to the annual inauspicious period of Pitrupaksha or Shraadh and the wait for GST cuts that have collided this year bringing business to a virtual standstill. But it is temporary, they say. Shraadh, a Hindu observance of honouring ancestors, will be on for two weeks, they say, after which sales will improve. And this year, the GST cuts will be an additional sweetener.
Retailers brace for temporary lull
“Shraadh comes every year and we are used to dealing with a slowdown during the period,” says Nilesh Gupta, director, Vijay Sales. While this two-week period is a challenge currently, September 22 onwards, when Navratri begins and the GST cuts will be implemented, sales will improve,” Gupta says. He expects at least a 10-15% improvement in weekly sales from Navratri, which is likely to get better as Dussehra and then Diwali nears.
Sanjay Mewani, director, Kohinoor Electronics, is also looking beyond the Shraadh period. “Footfalls will improve during Navratri and sales conversions will also get better. This phase is temporary, though three weeks of September including the coming two weeks are tough, which is almost two-thirds of the month,” he says.
Just how challenging this period is can be gauged from this: Sales executives are doing their best to convince the odd customer walking into stores, offering everything from at least a 22-25% discount on price, three-year warranty and free installation. But prospective customers are simply not buying enough.
Discounts fail to lure cautious buyers
“Out of 10 walk-ins, just one or two are converting into sales, that too after much persuasion,” says Vishal Gupta (name changed on request), a sales executive at Reliance Digital in Mumbai. “We are also not sure how the GST cuts will play out. Brands may decide to reduce the warranty period from three years to one year, even as they reduce price. We are telling consumers this is the best time to buy,” Gupta says.
In Delhi, a sales executive at Croma says that business is down by about 60-70%. Older inventory, such as mobile phones from 2024, are placed conveniently for shoppers and have higher discount tags. But business is slow, the executive said.
“There is a GST overhang, but it is notional. The difference may not be significant, but I don’t think consumers are listening as they wait for the cuts to kick in,” the executive said.
NS Satish, president, Haier Appliances India, admits that an early announcement of GST rationalisation (on August 15) has led to a peculiar problem of slow sales at stores. And the slowdown, he says, is visible across categories despite a 10% GST cut (from 28% to 18%) announced in ACs, TVs above 32 inches and dish washers only. Refrigerators and washing machines continue to attract 18% GST.
“Brands and retailers have no option but to wait for this period (of Shraadh) to conclude. Once that is over, we see an improvement in demand on the back of the GST boost to consumption and festive sentiment,” Satish says.