Homeware products beat FMCG in sales for retailers

Retailers see double-digit growth in kitchen, bed and bath segments

Although the real estate sector is yet to come out of the woods, categories such as bed and bath, home furnishings, and kitchenware are seeing strong sales for retailers.

Not yet ready to make decisions on high-ticket purchases, customers are loosening their purse strings on refurbishing their homes and redoing their kitchens, retailers say. Shoppers Stop, which runs home improvement chain Home Stop, is seeing more than 20 per cent growth year on year in categories such as furnishings, and bed and bath, says Govind Shrikhande, managing director at Shoppers Stop. Interestingly D Mart, the retail chain owned by stock market icon R K Damani, has seen 2-3 percentage point growth in these categories over fast-moving consumer goods, which are the most basic commodities for consumers.

“It is strange that we are seeing higher growth in categories such as bed and bath, and kitchenware than in FMCG products,” says a senior executive with D Mart.

D Mart is seeing 20-25 per cent growth in the categories year on year, which is almost double that of last year.

Adds Sadashiv Nayak, CEO, Future Retail: “Home categories are doing well. Customers are experimenting with new products and categories.”

Nayak says the company’s retail chains are acquiring critical mass in the ‘exchange melas’ it holds regularly.

In the exchange melas, customers swap their old furniture, bed and bath and other products with new ones.

Future Retail’s home segment has seen a same-store sales growth of 5.5 per cent in the June quarter of 2014-15 compared with 3.7 per cent in the corresponding quarter of the previous financial year. Same-store sales growth refers to growth from stores which are in business for a year or more.

Retailers say customers are still hunting for bargains. “This category is growing mainly due to the reason that a soft makeover of the house by adding accessories, changing furnishings and adding lighting is the cost-efficient way of getting a new look for the house,” says Ashok Kaul , chief executive officer, retail, Bombay Dyeing.

Adds a spokesperson for Spencer's Retail: "Shoppers today have become more conscious and keep themselves aware of the latest trends in the market, and these categories have a wide offering, with prices ranging from Rs 49 to Rs 5,000, which makes them affordable for all."

“As sentiments have improved, people have started spending selectively in certain categories like home furnishings,” says Prashant Agarwal, joint managing director at Wazir Advisors.