Festive season sales push up retail targets

This festive season has been successful enough in pushing sales for companies to revise upwards their year-end targets. A survey by the Federation of Indian Chambers of Commerce and Industry (Ficci) says demand conditions have improved across sectors.

The survey states there is a definite improvement in demand at the retail level. Retailers of leading automobile, consumer durables and FMCG (fast moving consumer goods) brands say the month of September saw a substantial jump in sales for products across segments. Retailers reported a 45 per cent increase in footfalls and a 30 per cent increase in sales. The trend is expected to continue in the coming months.

The highest degree of optimism was reflected by auto companies, which have seen sales go up well since the middle of this year. Many companies reported a sales increase of up to 25 per cent in the current season. According to representatives of auto companies, the stimulus package announced for the economy by the government has had a definite impact on their sales. The lowering of excise duty gave a definite boost.

More, the launch of new models, lowering of interest rates by banks on auto loans, reduced loan processing fee and the sixth pay commission award were some other reasons contributing to higher sales. Companies have reported that while last year interest rates on auto loans were in the range of 12-15 per cent, this has now come down to 11-12 per cent.

FMCG majors like Nestle, Cadbury, Coca-Cola, Pepsi and Dabur, and leading sweetmeat manufacturers like Bikanervala and Haldiram are expecting a sales growth of around 20 per cent in their food products during the Diwali season. Dabur is already observing an increase of around 15-20 per cent in sales volume of fruit juices through gift packs launched specifically for the festival. Similarly, sweet houses are expecting a 20-25 per cent increase in sales volume. On an average, the big retailers are expecting 30-35 per cent increase in sales this Diwali.