Online apparel retailers such as Myntra and Ajio have begun their end of season sales (EOSS) over the weekend, offering discounts as low as 70-90% amid a broader retail slowdown. While EOSS discounts tend to be in the range of 50-60% since it is a clearance sale ahead of a new season, this year’s discounting is at a record low as inventory levels are high, industry sources said. Offline retailers such as Shoppers Stop and Lifestyle will kick off their EOSS this week, with discounts expected to be on similar lines, experts said, across fashion and lifestyle products.
“A combination of unseasonal rains and uncertainty have hurt out-of-home consumption over the last few months,” Ankur Bisen, senior partner and head, retail, consumer products & food, Technopak Advisors, said.
Apart from apparels, categories such as beverages, ice-creams, durable products such as air conditioners and coolers are all stuck with high inventories as the summer months have not taken off as anticipated by most manufacturers. Makers of air conditioners, for instance, have indicated that sales are down 20-25% in April-May compared to last year while ice cream, beverage and talcum powder makers have pointed to a year-on-year sales decline of 15-20%, executives said.
A business survey by the Retailers Association of India (RAI) last week said that April retail sales were at 4% only versus the same period last year, with the south and east recording a 2% year-on-year rise only. Experts say that the month of May is also expected to be weak amid an early onset of monsoons in most parts of the country.
Kumar Rajagopalan, CEO of RAI, said: “Retailers have reported that footfalls into stores have reduced. However, the customers who are coming to stores are buying with a purpose.”
That said, the months of June and July are expected to see discounting levels grow as retailers try to clear out inventory. Besides fashion and lifestyle products, the trend is expected to play out in durables and electronics too, with AC players in particular looking to clear out existing inventory as quickly as possible before the month of October when temperatures tend to rise in many parts of India.
“There is an inventory build-up of about 10-15% in the industry which is likely to get exhausted by the second quarter of the current fiscal (FY26),” NS Satish, president of Haier Appliances, said.