Domestic retail major Shoppers Stop has shortened its end-of-season July sale to just 30 days (which might be extended to 35 days) as opposed to what has been a 40-45 day practice in the past two to three years. Calling it an industry-wide trend, Govind Shrikhande, CEO of Shoppers Stop, told FE, “Our aim is to push sales at full price value in order to protect margins and grow volumes, hence we are looking at a sale period of 30-35 days in July.”

The strategy assumes importance at a time when major retail brands such as Shoppers Stop, Future Retail and Pantaloons are all witnessing a reduction in sales volume.

Same-store-sale declined for Shoppers Stop to 4% from 8.4% in March 2015, comparable on y-o-y basis.

“Shortening the sale period may be detrimental to sales volume,” said Priyanka Poddar, an analyst at India Ratings & Research. “Retailers has been able to hold its margin only by containing operating costs. Price competition by online rivals is a reality that cannot be resolved by shortening the sale period,” Poddar added.

Despite such concern, Shrikhande said that discounts, which have so far been in the range of 25% to 40%, cannot be any deeper.

FE could not determine whether the company will come up with a different discount strategy for the upcoming sale season.

Brands such as Aldo, Mango, Ninewest, Marks & Spencer etc. have earlier extended sales period to 7-8 weeks and have even had mid-season sales.

Well performing malls are now reluctant to lengthen the sale period. “The intention is to reduce the sale period from 5 to 6 weeks to 4 weeks,” said Nirzar Jain, vice president of Oberoi Mall in Goregaon.

Developers and retail brands have a revenue sharing arrangement, wherein brands pay a portion of their rent depending on how well the store is performing. “Five years back, annually we used to have 40 days of sale. I don’t think we can achieve that anymore but 60 days is definitely a target,” said Shrikhande.

Intense pressure from online portals in the past two years forced brick-and-mortar retailers to extend sales upto 60-75 days.“It has been a double whammy as brands have had to extend the sale period to liquidate inventory, which has in turn hurt brand quality,” said Rajneesh Mahajan, COO, Inorbit Malls. Hence, malls such as Oberoi Mall and Inorbit are not keen on longer sale periods. On the contrary, according to Mahajan, retailers are trying to go on and off sale together so that they don’t eat into one another’s businesses.

RAI or the retailer’s association, meanwhile, has appealed to retailers to not go on-sale haphazardly but at the same time. “If all stores go on sale together, it makes a bigger impact on the consumer, who might be confused by multiple timings,” said Kumar Rajagopalan, CEO of RAI.

So far, only Shoppers Stop has confirmed a shorter EOSS duration. The Future Group said it will stick to a 5-6 week sale period. “Duration of sale is also a factor of market conditions. This year, we have a delayed festive season so brands might be able to get away with a four-week sale period,” said Rakesh Biyani, director.

Market analysts said shorter sale duration makes sense as a strategy when sales are robust but lower discretionary spending is the biggest overhang for the retail sector at the moment. A June report by Indiaratings said the outlook for the sector in FY16 could become negative.

“Low consumer confidence has led to significant deterioration in sales and profitability and could even lead to a negative outlook for the retail sector as a whole,” the report said.

“Ultimately a company has to clear inventory by offering discounts so after the first two weekends of sale, we will be able to ascertain whether a shorter duration will work, depending on how much people are willing to spend,” said a retail analyst, who did not want his firm named.